Three Months Ended

January 31,

2022
2021

(In Thousands of Dollars)
Operating activities:

Net income

$
69,153

$
779

Adjustments to reconcile net income to net cash provided by operating activities:

Net gain on sale of Maryland properties
(70,003
)
0-
Depreciation

1,820

2,295

Amortization

434

404

Stock based compensation expense

5

12

Director fees and related interest paid in stock units

44

110

Loss on investment in tenancy-in-common

124

27

Deferred rents - straight line rent

10

206

Deferred real estate tax appeal fees
35
0-
Bad debt expense

408

171

Changes in operating assets and liabilities:

Tenants' security accounts

(734
)

(46
)
Accounts receivable, prepaid expenses and other assets

2,139

548
Accounts payable, accrued expenses and deferred director compensation payable

91

728
Deferred revenue

(584
)

(115
)
Due to affiliate - accrued interest

(47
)

44
Deferred interest on mortgages

0-

(2
)
Net cash provided by operating activities

2,895

5,161
Investing activities:

Proceeds from sale of Maryland properties, net
247,412
0-
Proceeds from payment of secured loans receivable inclusive of accrued interest
5,094
0-
Capital improvements - existing properties

(485
)

(409
)
Deferred leasing costs
(60
)
(65
)
Distribution from investment in tenancy-in-common
357
0-
Net cash provided by (used in) investing activities
252,318
(474
)
Financing activities:

Repayment of mortgages

(171,002
)

(969
)
Proceeds from mortgage loan refinancing
7,500
0-
Deferred financing costs

(246
)

(73
)
Due to affiliate - loan repayment
(3,205
)
0-
Dividends paid

(686
)

0-

Distributions to noncontrolling interests in subsidiaries

(19,700
)

0-

Net cash used in financing activities

(187,339
)

(1,042
)
Net increase in cash, cash equivalents and restricted cash

67,874

3,645

Cash, cash equivalents and restricted cash, beginning of period

39,045

39,517

Cash, cash equivalents and restricted cash, end of period

$
106,919

$
43,162

Supplemental disclosure of cash flow data:

Interest paid

$
2,525

$
2,472

Supplemental schedule of non cash activities:

Operating activities:

Commercial tenant security deposits applied to accounts receivable

$
0-

$
18

Investing activities:
Accrued transactional costs for sales of Maryland properties
$
407
$
0-
Accrued capital expenditures, construction costs and pre-development costs

$
58

$
75

Financing activities:

Dividends declared but not paid

$
686

$
342

Dividends paid in share units

$
17

$
8

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:

Cash and cash equivalents

$
95,438

$
39,788

Tenants' security accounts

1,062

1,451

Funds held in post-closing escrow
9,337
0-
Mortgage escrows (included in prepaid expenses and other assets)

1,082

1,923

Total cash, cash equivalents and restricted cash

$
106,919

$
43,162

First Real Estate Investment Trust of New Jersey ~~(“FREIT”)~~ was organized on November 1, 1961 as a New Jersey Business Trust. On July 1, 2021, ~~FREIT~~First Real Estate Investment Trust of New Jersey completed the change of its form of organization from a New Jersey real estate investment trust to a Maryland corporation (the “Reincorporation”) which was approved by its stockholders at the annual meeting of stockholders held on May 6, 2021. The Reincorporation changed the law applicable to ~~FREIT’s~~First Real Estate Investment Trust of New Jersey’s affairs from New Jersey law to Maryland law and was accomplished by the merger of ~~FREIT~~First Real Estate Investment Trust of New Jersey with and into its wholly owned subsidiary, First Real Estate Investment Trust of New Jersey, Inc. (“~~FREIT Maryland”~~FREIT”, “Trust”, “us”, “we”, “our” or the “Company”), a Maryland corporation. As a result of the Reincorporation, the separate existence of ~~FREIT~~First Real Estate Investment Trust of New Jersey has ceased and FREIT ~~Maryland~~has succeeded to all the business, properties, assets and liabilities of ~~FREIT.~~First Real Estate Investment Trust of New Jersey. Holders of shares of beneficial interest in ~~FREIT~~First Real Estate Investment Trust of New Jersey have received one newly issued share of common stock of FREIT ~~Maryland~~ for each share of ~~FREIT~~First Real Estate Investment Trust of New Jersey that they own, without any action of stockholders required and all treasury stock held by ~~FREIT~~First Real Estate Investment Trust of New Jersey was retired.

FREIT ~~Maryland~~ is organized and will continue to operate in such a manner as to qualify for taxation as a REIT under the Internal Revenue Code of 1986, as amended, and its stock is traded on the ~~over-the counter~~over-the-counter market under the trading symbol FREVS.

The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the rules of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnotes required by GAAP for complete financial statements have been omitted. It is the opinion of management that all adjustments considered necessary for a fair presentation have been included, and that all such adjustments are of a normal recurring nature.

The consolidated results of operations for the three-month period ended January 31, ~~2022~~2023 are not necessarily indicative of the results to be expected for the full year or any other period. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in ~~the~~FREIT’s Annual Report on Form 10-K for the year ended October 31, ~~2021 of FREIT Maryland.~~2022.

~~Certain prior year cash flow line items have been reclassified to conform to the current year presentation.~~

In March 2020 and January 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-04 “Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, and ASU 2021-01 “Reference Rate Reform (ASC 848): Scope” which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through the recently deferred date of December 31, ~~2022.~~2024. We currently do not anticipate the need to modify our existing debt agreements as a result of reference rate reform in the current year, however if any modification is executed as a result of reference rate reform, the Company will elect the optional expedient available under ASU 2020-04 and ASU 2021-01, which allows entities to account for the modification as if the modification was not substantial. We will disclose the nature of and reason for electing the optional expedient in each interim and annual financial statement period if and when applicable through December 31, ~~2022.~~2024.

The FREIT ~~Maryland~~ Board of Directors (“Board”) declared a dividend of ~~$0.10~~approximately $372,000 ($0.05 per ~~share~~share) in the first quarter of Fiscal 2023, which was paid on March 15, ~~2022~~2023 to stockholders of record on March 1, ~~2022. The Board will continue to evaluate the dividend on a quarterly basis.~~2023.

Basic earnings per share is calculated by dividing net income attributable to common equity (numerator) by the weighted average number of shares and vested share units (See Note 14) outstanding during each period (denominator). The calculation of diluted earnings per share is similar to that of basic earnings per share, except that the denominator is increased to include the number of additional shares that would have been outstanding if all potentially dilutive shares, such as those issuable upon the exercise of stock options, were issued during the period using the Treasury Stock method. Under the Treasury Stock method, the assumption is that the proceeds received upon exercise of the options, including the unrecognized stock option compensation expense attributable to future services, are used to repurchase ~~FREIT Maryland’s~~FREIT’s stock at the average market price during the period, thereby increasing the number of shares to be added in computing diluted earnings per share. For the three months ended January 31, 2023, the outstanding stock options increased the average dilutive shares outstanding by approximately 9,000 shares with no impact on earnings per share. For the three months ended January 31, 2022, the outstanding stock options increased the average dilutive shares outstanding by approximately 63,000 shares with an impact of approximately $0.06 on earnings per share. ~~For~~ There were no anti-dilutive shares for

the three months ended January 31, ~~2021, the outstanding stock options were anti-dilutive with no impact on earnings per share. There were approximately 0~~2023 and ~~311,000, anti-dilutive shares for the three months ended January 31, 2022 and 2021, respectively.~~2022. Anti-dilutive shares consist of out-of-the money stock options under the Equity Incentive Plan (See Note 13).

In accordance with “Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC 815")”, FREIT ~~Maryland~~ has been accounting for the Damascus Centre, LLC (“Damascus Centre”), FREIT Regency, LLC (“Regency”), Wayne PSC, LLC (“Wayne PSC”) and Station Place on Monmouth (“Station Place”) interest rate swaps and the Grande Rotunda, LLC (“Grande Rotunda”) interest rate cap as cash flow hedges marking these contracts to market, taking into account present interest rates compared to the contracted fixed rate over the life of the contract and recording the unrealized gain or loss on the swaps and cap in comprehensive ~~income.~~income (loss). On December 30, 2021, the ~~Rotunda~~ property owned by Grande Rotunda was sold, a portion of the proceeds from the sale was used to pay off the $116.5 million then outstanding balance of ~~this~~the underlying loan and the corresponding interest rate cap on this loan matured with no settlement due at maturity. On January 10, 2022, the property owned by Damascus Centre was sold and a portion of the proceeds from the sale was used to pay off the $18.2 million then outstanding balance of ~~this~~the underlying loan and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on this loan which was included as interest expense on the accompanying condensed consolidated statement of income for the three months ended January 31, 2022. (See Note 7 for further details on the sales of these properties.) On June 17, 2022, Wayne PSC terminated its interest rate swap contract on its underlying loan held with People’s United Bank, which had a maturity date of October 2026, for a settlement amount of approximately $1.4 million. People’s United Bank held the proceeds from this settlement in escrow until the underlying loan was paid off in July 2022. (See Note 9 for further details.)

For the three months ended January 31, 2023 and 2022, ~~and 2021,~~ FREIT ~~Maryland~~ recorded an unrealized loss of approximately $450,000 and unrealized gain of ~~approximately~~ $1,262,000, ~~and $498,000,~~ respectively, in the condensed consolidated statements of comprehensive (loss) income representing the change in the fair value of these cash flow hedges during such periods. As of January 31, ~~2022,~~2023, there was an asset of approximately ~~$71,000 for the Wayne PSC swap and a liability of approximately $475,000~~$482,000 for the Regency swap and ~~$642,000~~$477,000 for the Station Place swap. As of October 31, ~~2021,~~2022, there was ~~a liability~~an asset of approximately ~~$278,000 for the Damascus Centre swaps, $348,000 for the Wayne PSC swap, $750,000~~$611,000 for the Regency swap ~~$932,000~~and $798,000 for the Station Place ~~swap and $0 for the Grande Rotunda interest rate cap.~~swap.

The fair values are based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance).

On February 28, 2020, FREIT ~~Maryland~~ reorganized its subsidiary S and A Commercial Associates Limited Partnership (“S&A”) from a partnership into a tenancy-in-common form of ownership (“TIC”). Prior to this reorganization, FREIT ~~Maryland~~ owned a 65% ~~membership~~partnership interest in S&A, which owned 100% of the Pierre Towers property located in Hackensack, New Jersey through its 100% interest in Pierre Towers, LLC. Pursuant to the TIC agreement, FREIT ~~Maryland~~ ultimately acquired a 65% undivided interest in the Pierre Towers property, which was formerly owned by S&A. Based on the guidance of Accounting Standards Codification 810, “Consolidation”, ~~FREIT Maryland’s~~FREIT’s investment in the TIC is accounted for under the equity method of accounting. While ~~FREIT Maryland’s~~FREIT’s effective ownership percentage interest in the Pierre Towers property remained unchanged after the reorganization to a TIC, FREIT ~~Maryland~~ no longer had a controlling interest as the TIC is now under joint control.

~~FREIT Maryland’s~~FREIT’s investment in the TIC was approximately ~~$18.9 million and $19.4~~$18.8 million at January 31, ~~2022~~2023 and October 31, ~~2021, respectively, with~~2022. For the three months ended January 31, 2023 and 2022, FREIT recognized a loss on investment in TIC of approximately $67,000 and $124,000, ~~and $27,000,~~respectively, in the accompanying condensed consolidated statements of ~~income for the three months ended January 31, 2022 and 2021, respectively.~~income.

Hekemian & Co., Inc. (“Hekemian & Co.”) manages the Pierre Towers property ~~based on~~pursuant to a management agreement between the owners of the TIC and Hekemian & Co. dated as of February 28, 2020, which was for an initial term of one (1) year and which renews for successive one (1) year terms unless either party gives written notice of termination to the other party at least sixty (60) days prior to the end of the then-current term. The management agreement renewed for a successive one (1) year term on February 28, 2023 and will expire on February 28, 2023. The management agreement is for a term of one year and is automatically renewed for successive periods of one year unless either party gives not less than sixty (60) days prior notice of non-renewal. 2024.

The management agreement requires the payment of management fees equal to 5% of rents collected. Management fees, charged to operations, were approximately ~~$98,000~~$103,000 and ~~$93,000~~$98,000 for the three months ended January 31, ~~2022~~2023 and ~~2021,~~2022, respectively. The Pierre Towers property also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its property. Hekemian & Co. is paid a commission for these services. ~~Such~~There were no such commissions, ~~were~~ charged to operations, ~~and amounted to approximately $0 and $10,000~~ for the three months ended January 31, ~~2022~~2023 and ~~2021, respectively.~~2022.

The following table summarizes the balance sheets of the Pierre Towers property as of January 31, ~~2022~~2023 and October 31, ~~2021,~~2022, accounted for by the equity method:

The following table summarizes the statements of operations of the Pierre Towers property for the three months ended January 31, ~~2022~~2023 and ~~2021,~~2022, accounted for by the equity method:

On January 14, 2020, FREIT Maryland and certain of its affiliates (collectively, the “Sellers”), entered into a Purchase and Sale Agreement (as subsequently amended, the “Purchase and Sale Agreement”) with Sinatra Properties LLC (the “Purchaser”), which provides for the sale by the Sellers to the Purchaser of 100% of the Sellers’ ownership interests in six real properties held by the Sellers in exchange for the purchase price described therein, subject to the terms and conditions of the Purchase and Sale Agreement. On April 30, 2020, the Sellers delivered written notice to the Purchaser of the Sellers’ termination of the Purchase and Sale Agreement in accordance with its terms due to the occurrence of a “Purchaser Default” thereunder, based on the Purchaser’s failure to perform its obligations under the Purchase and Sale Agreement and close the transactions contemplated therein.

Upon the execution of the Purchase and Sale Agreement, the Purchaser delivered into escrow a deposit in the amount of $15 million (the “Deposit”), in the form of an unconditional, irrevocable letter of credit in such amount (the “Letter of Credit”). The Purchase and Sale Agreement provides that the Sellers’ exclusive remedy, in the event of a “Purchaser Default” and the termination of the Purchase and Sale Agreement, is the forfeiture of the Deposit to the Sellers as liquidated damages. Accordingly, contemporaneously with the Sellers’ delivery of the termination notice to the Purchaser, the Sellers delivered written notice to the escrow agent requesting that the escrow agent release the Letter of Credit from escrow and deliver same to the Sellers.

~~On May 6, 2020, the Purchaser filed a complaint (the “Complaint”) against the Sellers in~~February 4, 2022, the Superior Court of New Jersey, ~~in which, among other things,~~Monmouth County (“Court”) entered an Order with respect to summary judgment motions filed by the ~~Purchaser alleged breach of contract and breach of the covenant of good faith and fair dealing against the Sellers~~parties in connection with ~~the Sellers’ termination~~litigation between certain affiliates of ~~the Purchase~~FREIT (the “Sellers” or “Defendant”) and ~~Sale Agreement.~~Sinatra Properties, LLC (“Sinatra” or “Plaintiff”). The ~~Purchaser sought (a)~~litigation relates to a ~~judgment of specific performance compelling the Sellers to convey the properties under the~~ Purchase and Sale Agreement to the Purchaser; (b) declaratory judgment from the court that (i) the Purchase and Sale Agreement was not terminated, (ii) the Purchaser was not in default under the Purchase and Sale Agreement, and (iii)entered into on January 14, 2020 (“PSA”) between the Sellers ~~were in default under~~and Sinatra involving the ~~Purchase and Sale Agreement, subject to a right to cure; (c) an order for injunctive relief compelling~~sale by the Sellers ~~to perform~~of 100% of their ownership interests in six (6) real properties held by the Purchase and Sale Agreement; (d) in the event that the court did not order specific performance, a judgment directing that the Purchaser’s $15 million deposit under the Purchase and Sale Agreement be returned to the Purchaser, and compensatory, consequential and incidental damages in an amount to be determined at trial; and (e) attorneys’ fees and costs.

The Purchaser filed lis pendens with respect to each of the six properties that were subject to the Purchase and Sale Agreement, providing notice to the public of the Complaint. The lis pendens have been dismissed by the Court ~~pursuant to the~~ Order entered on February 4, 2022 ~~discussed below. Accordingly, subject to the Purchaser’s possible challenge of the Court’s Order, the future sale or financing of these properties is not affected by the lis pendens.~~

~~On June 17, 2020, the Sellers filed their answer, separate defenses, and counterclaims~~ (the “Answer”) in response to the Complaint, in which, among other things, the Sellers (a) denied the Purchaser’s claim that the Sellers’ termination of the Purchase and Sale Agreement was wrongful, and asserted that there was no contractual basis in the Purchase and Sale Agreement to relieve the Purchaser from its obligation to perform thereunder, or to defer or postpone the Purchaser’s obligation to perform, (b) asserted certain defenses to the allegations set forth in the Complaint without admitting any liability, and (c) requested relief from the Court in the form of (i) judgment in the Sellers’ favor dismissing all of the Purchaser’s claims against them with prejudice and denying all of the Purchaser’s requests for relief, (ii) reasonable attorneys’ fees and costs, and (iii) such other and further relief as the Court deemed just.

In addition, the Answer asserted counterclaims by the Sellers against the Purchaser for breach of contract due to the Purchaser’s failure to close the Purchase and Sale Agreement in accordance with its terms, and the Sellers sought a declaratory judgment from the Court that the Sellers properly terminated the Purchase and Sale Agreement in accordance with its terms due to the Purchaser’s default and an order from the Court that the Purchaser authorized the escrow agent to release the $15 million deposit under the Purchase and Sale Agreement to the Sellers. On April 28, 2021, the Sellers amended the Answer to include (1) counterclaims against the Purchaser for breach of contract due to the Purchaser’s breach of confidentiality and non-disclosure obligations contained in the Purchase and Sale Agreement, and (2) third-party claims against Purchaser’s affiliate Kushner Realty Acquisition LLC for breach of its confidentiality and non-disclosure obligations contained in the non-disclosure agreement entered into by the parties in connection with the negotiation of the transactions contemplated by the Purchase and Sale Agreement, based on the conduct of the Purchaser and its affiliates after the Sellers terminated the Purchase and Sale Agreement.

In connection with these counterclaims and third-party claims, the Answer sought the following relief from the Court: (a) liquidated damages in the amount of $15 million, as provided in the Purchase and Sale Agreement; (b) in the alternative to the liquidated damages provided for in the Purchase and Sale Agreement, money damages in an amount to be determined at trial; (c) interest, attorneys’ fees and costs associated with the defense of the Purchaser’s claims and the prosecution of the Sellers’ counterclaims against the Purchaser, as provided for in the Purchase and Sale Agreement; (d) judgment declaring that the Sellers properly terminated the Purchase and Sale Agreement due to the Purchaser’s default thereunder; (e) judgment declaring that the Purchaser must authorize the escrow agent to release the $15 million deposit to the Sellers; (f) an order enjoining the Purchaser and its affiliates from engaging in further breaches of the Purchase and Sale Agreement and non-disclosure agreement, and compelling the Purchaser and its affiliates to return the Sellers’ confidential information and materials and to use best efforts to ensure the return of the Sellers’ confidential information and materials from third parties to whom the Purchaser and/or its affiliates provided such materials; and (g) such other relief as the Court deemed just and equitable.

In the Answer filed by the Purchaser on September 15, 2020 and the Answer and Affirmative Defenses filed by the Purchaser and Kushner Realty Acquisition LLC on June 7, 2021, the Purchaser and Kushner Realty Acquisition LLC have generally denied the claims, counterclaims and allegations contained in the Sellers’ original and amended Answer, and asserted affirmative defenses to the Sellers’ claims and counterclaims.

Each of the Sellers and the Purchaser filed motions for summary judgment (“Summary Judgment Motions”) with the Court in which the litigation is pending seeking, among other things, the dismissal of the other parties’ claims.

~~On February~~“February 4 ~~2022, the Court entered an Order (the “Order”~~Order”) with respect to the Summary Judgment Motions ~~which~~ provides as follows:

~~(1) The Court finds that the Plaintiff’s have breached the subject contract and the Court dismisses all claims for relief filed by the Plaintiff~~

On May 31, 2022, Sinatra filed a Motion for Reconsideration with the Court, requesting that the Court reconsider its February 4, 2022 Order and, among other things, (a) grant Sinatra’s motion for summary judgment, and (b) reverse the Court’s findings that (1) Sinatra breached the Purchase and Sale Agreement, (2) the Sellers did not breach the Purchase and Sale Agreement and (3) the Court’s dismissal of the Complaint and ~~dismisses~~Lis Pendens. On July 8, 2022, the ~~Lis Pendens.~~

Following the February 4 Order, the Sellers and the Purchaser each filed a motion for an award of attorney’s fees and costs pursuant to the applicable provisions of the Purchase and Sale Agreement. On December 8, 2022 the Court entered an Order awarding Sellers $3,420,422.88 in attorneys’ fees and denying the Plaintiff’s request for attorneys’ fees (the “December 8 Order”). Upon entering the December 8 Order, the Court had adjudicated all unresolved issues in the action.

On December 8, 2022, the Sellers filed a Notice of Appeal, appealing from that portion of the February 4 Order which declined to enforce the liquidated damages provision in the Purchase and Sale Agreement. As a result of such appeal by the Sellers, the liquidated damage ~~provision~~amount of $15 million remains in escrow and has not been returned to Sinatra.

On December 22, 2022, the Purchaser filed a Notice of Cross Appeal appealing from all determinations by the Court adverse to the Purchaser, including (i) that portion of the ~~contract is not enforceable and the Court Orders~~February 4 Order holding that the ~~$15 million held~~Purchaser breached the contract; (ii) the denial of the Purchaser’s motion for reconsideration of the February 4 Order; and (iii) the December 8 Order awarding the Sellers $3,420,422.88 in ~~escrow be returned to~~attorneys’ fees and denying the ~~Plaintiff.~~Purchaser’s request for attorneys’ fees.

~~(3) The Court dismisses the Counterclaims and Third Party Complaint. All pleadings are dismissed.~~

~~The Sellers are evaluating the Order and their rights and remedies with respect thereto.~~ The Sellers continue to believe that the allegations set forth in the Complaint ~~and Answer~~ filed by ~~the Purchaser~~Sinatra and in the Answer to Counterclaims and Third-Party Complaint and Affirmative Defenses filed by ~~the Purchaser~~Sinatra and Kushner Realty Acquisition LLC, are without merit.

Through the quarter ended January 31, ~~2022,~~2023, the $15 million deposit ~~has~~and the $3,420,422.88 award of attorney’s fees have not been included in income in the accompanying condensed consolidated ~~statement~~statements of income. Legal costs attributed to the legal proceeding between FREIT ~~Maryland~~ and certain of its affiliates and Sinatra Properties, LLC have been incurred in the amount of approximately ~~$613,000~~$196,000 and ~~$481,000~~$613,000 for the three months ended January 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and are included in operating expenses on the condensed consolidated statements of income.

On November 22, 2021, certain affiliates (the “Maryland Sellers”) of FREIT ~~Maryland~~ entered into a Purchase and Sale Agreement (the “Maryland Purchase and Sale Agreement”) with MCB Acquisition Company, LLC (the “Maryland Purchaser”), a third party, pursuant to which the Maryland Sellers agreed to sell three properties to the Maryland Purchaser. The properties consisted of retail and office space and a residential apartment community owned by Grande Rotunda, LLC (the “Rotunda Property”), a shopping center owned by Damascus Centre, LLC (the “Damascus Property”), and a shopping center owned by WestFREIT Corp. (the “Westridge Square Property”). FREIT ~~Maryland~~ owns 100% of its subsidiary, WestFREIT Corp. (“WestFREIT”), a 60% interest in Grande Rotunda, LLC (“Grande Rotunda”), the joint venture that owned the Rotunda Property, and a 70% interest in Damascus Centre, LLC (“Damascus Centre”), the joint venture that owned the Damascus Property.

The original purchase price for the Rotunda Property, the Damascus Property and the Westridge Square Property (collectively the “Maryland Properties”) under the Maryland Purchase and Sale Agreement was reduced by $2,723,000 from $267,000,000 to $248,750,269, after giving effect to the $15,526,731 escrow deposit described below. This reduction in the sales price was to account for improvements and repairs to the Maryland Properties and miscellaneous items identified by the Maryland Purchaser in the course of its due diligence inspection. Additionally, the Maryland Purchaser was obligated under the Maryland Purchase and Sale Agreement to deposit a total of $15,526,731 in escrow with respect to certain leases at the Maryland Properties, which have not been executed or where the rent commencement date has not occurred or economic obligations of the Maryland Sellers under certain leases remain unpaid. Although there can be no assurance, a portion of the $15,526,731 escrow deposit (the “Maryland Purchaser Escrow Payment”) may be paid to the Maryland Sellers depending upon the outcome of construction and leasing activities at the Maryland Properties.

On December 30, 2021, the sale of the Rotunda Property which had a net book value of approximately $135.7 million, was consummated by Grande Rotunda and the Maryland Purchaser for a purchase price of $191,080,598. Grande Rotunda received net proceeds from the sale of approximately $35.4 million, after payment of related mortgage debt in the amount of $116.5 million, payment of loans (including interest) to each of the partners in Grande Rotunda (FREIT Maryland with a 60% interest and Rotunda 100, LLC (“Rotunda 100”) with a 40% interest) in the amount of approximately $31 million, with FREIT Maryland receiving approximately $27.7 million, and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $4.8 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $14,026,401 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Rotunda Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of Grande Rotunda under certain leases remain unpaid. The net proceeds from the sale of approximately $35.4 million were distributed to the partners in Grande Rotunda with FREIT Maryland receiving approximately $21.4 million based on its 60% interest in Grande Rotunda. The sale of the Rotunda Property resulted in a net gain of approximately $51.2 million which includes approximately $8.2 million of proceeds anticipated to be released from the $14,026,401 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $1.8 million and a write-off of unamortized lease commissions of approximately $1.1 million. During the first quarter ended January 31, 2022, secured loans including accrued interest held by certain members in Rotunda 100 in the amount of approximately $5.1 million were repaid to FREIT Maryland. The Maryland Purchaser Escrow Payment Agreement provides for among other things, monthly disbursements from escrow to the Maryland Purchaser related to the aforementioned tenant lease agreements until the earlier of (i) the rent commencement date of the respective tenant lease agreements or (ii) 5-years from the date of the agreement. Release and amounts of escrowed funds to FREIT Maryland, generally, is contingent on the success and timing of future leasing activities at the Maryland Properties.

On January 7, 2022, the sale of the Westridge Square Property which had a net book value of approximately $11.5 million, was consummated by WestFREIT and the Maryland Purchaser for a purchase price of $20,984,604. WestFREIT paid net cash outlays from the sale of approximately $0.7 million, after payment of related mortgage debt in the amount of approximately $21.1 million and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $0.5 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $1,015,396 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Westridge Square Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of WestFREIT under certain leases remain unpaid. The sale of the Westridge Square Property resulted in a net gain of approximately $8.7 million which includes approximately $0.7 million of proceeds anticipated to be released from the $1,015,396 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $0.5 million and a write-off of unamortized lease commissions of approximately $0.3 million.

On January 10, 2022, the sale of the Damascus Property which had a net book value of approximately $24.6 million, was consummated by Damascus Centre and the Maryland Purchaser for a purchase price of $36,685,067. Damascus Centre received net proceeds from the sale of approximately $16.9 million, after payment of related mortgage debt in the amount of approximately $18.2 million and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on this loan and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $0.9 million (See Note 8). In addition, the Maryland Purchaser deposited a total of $484,934 of the Maryland Purchaser Escrow Payment in escrow with respect to certain leases at the Damascus Property, which have not been executed or where the rent commencement date has not occurred or economic obligations of Damascus Centre under certain leases remain unpaid. The net proceeds from the sale of approximately $16.9 million were distributed to the partners in Damascus Centre with FREIT Maryland receiving approximately $11.8 million based on its 70% interest in Damascus Centre. The sale of the Damascus Property resulted in a net gain of approximately $10.1 million which includes approximately $0.4 million of proceeds anticipated to be released from the $484,934 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $0.6 million and a write-off of unamortized lease commissions of approximately $0.3 million.

~~In summary, the~~ sale of the Maryland Properties having a total net book value of ~~$171.8~~$172.3 million (as adjusted) was consummated by the Maryland Sellers and the Maryland Purchaser for a purchase price of $248,750,269, after giving effect to the $15,526,731 escrow deposit (the “Maryland Purchaser Escrow Payment”). This sale resulted in net proceeds of approximately $53.9 million (inclusive of approximately $0.1 million in funds released during the first quarter of Fiscal 2023 and $1.9 million in funds released from the ~~sale of approximately $51.6 million,~~Maryland Purchaser Escrow Payment during Fiscal 2022), after payment of related mortgage debt in the amount of $155.8 million and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on the Damascus Property loan, payment of loans (including interest) to each of the ~~partners~~equity owners in Grande Rotunda in the amount of approximately $31 million and certain transactional expenses and transfer taxes including a brokerage ~~fee~~fees due to Hekemian & Co. of approximately $6.2 million. As of January 31, 2023, approximately $2,070,000 of the Maryland Purchaser Escrow Payment has been released from escrow to the Maryland Sellers. The escrow and related gain on sale were reduced by approximately $0.4 million in the first quarter of Fiscal 2023 and $1.2 million in the second quarter of Fiscal 2022 due to a change in estimate related to a change in the timing of anticipated rent commencement dates for certain tenants, which will reduce the escrowed funds available to be released to Grande Rotunda. Approximately $6 million and $6.3 million of remaining funds are held in a post-closing escrow for rents anticipated to be fully released in Fiscal 2023 and are included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheets as of January 31, 2023 and October 31, 2022, respectively. The sale of the Maryland Properties resulted in a net gain of approximately ~~$70~~$68.5 million (as adjusted by $0.3 million in the first quarter of Fiscal 2023) (with a consolidated impact to FREIT ~~Maryland~~ of approximately ~~$46.3~~$45.6 million) which includes approximately ~~$9.3~~$8 million of proceeds released and anticipated to be released from ~~the $15,526,731 of~~ funds held in escrow, ~~(included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022),~~ a write-off of the straight-line rent receivable of approximately $2.9 million and a write-off of unamortized lease commissions of approximately $1.7 million.

On August 4, 2022, FREIT’s Board declared a special, extraordinary, non-recurring cash distribution of approximately $51.5 million, or $7.50 per share, which was paid on August 30, 2022, to stockholders of record on August 16, 2022 (with an ex-dividend date of August 31, 2022). This distribution represented most of the net proceeds of FREIT’s sale of its portfolio of Maryland Properties.

As the disposal of the Maryland Properties did not represent a strategic shift that would have a major impact on ~~FREIT Maryland’s~~FREIT’s operations or financial results, the properties’ operations were not reflected as discontinued operations in the accompanying condensed consolidated financial statements.

Hekemian & Co. currently manages all of the properties owned by FREIT ~~Maryland~~ and its affiliates, except for the office building at the Rotunda Property, which was sold on December 30, 2021 and was formerly managed by an independent third party management company. The management agreement between FREIT ~~Maryland~~ and Hekemian & Co. dated as of November 1, 2001 (“Management Agreement”) expires on October 31, 2023 and is automatically renewed for successive periods of two years unless either party gives not less than six (6) months prior notice of non-renewal.

The Management Agreement requires the payment of management fees equal to 4% to 5% of rents collected. Such fees charged to operations were approximately ~~$484,000~~$326,000 and ~~$513,000~~$484,000 for the three months ended January 31, ~~2022~~2023 and ~~2021,~~2022, respectively. In addition, the Management Agreement provides for the payment to Hekemian & Co. of leasing commissions, as well as the reimbursement of certain operating expenses, such as payroll and insurance costs, incurred on behalf of ~~FREIT Maryland.~~FREIT. Such commissions and reimbursements amounted to approximately ~~$184,000~~$140,000 and ~~$129,000~~$184,000 for the three months ended January 31, ~~2022~~2023 and ~~2021,~~2022, respectively. FREIT ~~Maryland~~ also uses the resources of the Hekemian & Co. insurance department to secure various insurance coverages for its properties and subsidiaries. Hekemian & Co. is paid a commission for these services. Such commissions, ~~were~~ charged to operations, were approximately $50,000 and ~~amounted to approximately~~ $52,000 ~~and $69,000~~ for the three months ended January 31, 2023 and 2022, ~~and 2021,~~ respectively.

From time to time, FREIT ~~Maryland~~ engages Hekemian & Co., or certain affiliates of Hekemian & Co., to provide additional services, such as consulting services related to development, property sales and financing activities of ~~FREIT Maryland.~~FREIT. Separate fee arrangements are negotiated between Hekemian & Co. and FREIT ~~Maryland~~ with respect to such additional services. Such fees incurred for the three months ended January 31, ~~2022~~2023 and ~~2021~~2022 were approximately ~~$6,294,000~~$0 and ~~$0,~~$6,294,000, respectively. Fees incurred during Fiscal 2022 related to commissions to Hekemian & Co. for the following: $4,777,000 for the sale of the Rotunda Property; $917,000 for the sale of the Damascus Property; $525,000 for the sale of the Westridge Square Property; and $75,000 for the refinancing of the loan on the Boulders property. The commissions related to the sale of the Rotunda Property, the Damascus Property and the Westridge Square Property were charged against the gain on sale of the Maryland Properties (See Note 7) in the accompanying condensed consolidated statement of income ~~statement~~ for the three months ended January 31, 2022. The commission for the refinancing of the loan on the Boulders property was a deferred mortgage cost included in the unamortized debt issuance costs in the accompanying condensed consolidated balance ~~sheet~~sheets as of January 31, 2023 and October 31, 2022.

The Management Agreement provides for a termination fee (“Termination Fee”) in the event of a termination by FREIT without cause and a termination fee of 1.25 times the Termination Fee if the Management Agreement terminates following a merger or acquisition of FREIT (the “M&A Termination Fee”). On March 9, 2023, the Board approved an amendment to the Management Agreement (the “Second Amendment”) which provides, among other things, that the M&A Termination Fee shall be increased from 1.25 times the Termination Fee to 2.5 times the Termination Fee.

Robert S. Hekemian, Jr., Chief Executive Officer, President and a Director of FREIT, ~~Maryland,~~ is the Chief Executive Officer of Hekemian & Co. David B. Hekemian, a Director of FREIT, ~~Maryland,~~ is the President of Hekemian & Co. Allan Tubin, Chief Financial Officer and Treasurer of FREIT, ~~Maryland,~~ is the Chief Financial Officer of Hekemian & Co.

Director fee expense and/or executive compensation (including interest and dividends) incurred by FREIT ~~Maryland~~ for the three months ended January 31, ~~2022~~2023 and ~~2021~~2022 was approximately ~~$135,000~~$141,000 and ~~$116,000,~~$135,000, respectively, for Robert S. Hekemian, Jr., $10,000 and ~~$8,000,~~$10,000, respectively, for Allan Tubin and ~~$15,000~~$13,000 and ~~$14,000,~~$15,000, respectively, for David Hekemian (See Note 14). Such costs are included within operating expenses on the accompanying condensed consolidated statements of income.

The equity owners of Rotunda 100, which owns a 40% minority equity interest in Grande Rotunda, are principally employees of Hekemian & Co. To incentivize the employees of Hekemian & Co., FREIT Maryland advanced, only to employees of Hekemian & Co., up to 50% of the amount of the equity contributions that the Hekemian & Co. employees were required to invest in Rotunda 100. These advances were in the form of secured loans that bear interest at rates that float at 225 basis points over the ninety (90) day LIBOR, as adjusted each November 1, February 1, May 1 and August 1. These loans are secured by the Hekemian & Co. employees’ interests in Rotunda 100 and are full recourse loans. On December 7, 2017, the Board approved a further extension of the previously amended maturity dates of these loans to the date or dates upon which distributions of cash are made by Grande Rotunda to its members as a result of a refinancing or sale of Grande Rotunda or the Rotunda Property. On December 30, 2021, the Rotunda Property was sold and the net sales proceeds were distributed to the partners in Grande Rotunda. (See Note 7 for further details.) As of January 31, 2022, approximately $5.1 million of the secured loans receivable (including accrued interest) were repaid to FREIT Maryland. The aggregate outstanding principal balance of the Rotunda 100 notes was approximately $167,000 and $4,000,000 at January 31, 2022 and October 31, 2021, respectively. The accrued but unpaid interest related to these notes as of January 31, 2022 and October 31, 2021 amounted to approximately $54,000 and $1,292,000, respectively, and is included in secured loans receivable on the accompanying condensed consolidated balance sheets.

In Fiscal 2017, Grande Rotunda incurred substantial expenditures at the Rotunda Property related to retail tenant improvements, leasing costs and operating expenditures which, in the aggregate, exceeded revenues as the property was still in the rent up phase and the construction loan held with Wells Fargo at that time was at its maximum level, with no additional funding available to draw. Accordingly, during Fiscal 2017 the equity owners in Grande Rotunda contributed their respective pro-rata share of any cash needs through loans to Grande Rotunda. In Fiscal 2021, Grande Rotunda repaid $7 million to the equity owners in Grande Rotunda based on their respective pro-rata share resulting in a loan repayment to Rotunda 100 of approximately $2.8 million. As of October 31, 2021, Rotunda 100 had funded Grande Rotunda with approximately $3.3 million (including interest) which was included in “Due to affiliate” on the accompanying condensed consolidated balance sheet. On December 30, 2021, the Rotunda Property was sold and Grande Rotunda repaid approximately $31 million to the equity owners in Grande Rotunda resulting in a loan repayment to Rotunda 100 of approximately $3.3 million. As of January 31, 2022, all loans were repaid in full to each of the partners.

On August 19, 2022, Westwood Hills, LLC exercised its right, pursuant to the loan agreement, to extend the term of its $25 million loan on its property located in Westwood, New Jersey, for an additional six (6) months from an initial maturity date of October 1, 2022 to a new maturity date of April 1, 2023. On March 1, 2023, Westwood Hills, LLC exercised its right, pursuant to the loan agreement, to extend the term of its loan, for an additional six (6) months to a new maturity date of October 1, 2023 on the same terms and conditions as stated in the loan agreement. As of January 31, 2023, $25,000,000 of this loan was drawn and outstanding and the interest rate was 8.37%.

On July 22, 2022, Wayne PSC, LLC (“Wayne PSC”) refinanced its $22.1 million loan (inclusive of deferred interest of approximately $136,000), which would have matured on October 1, 2026, on its Preakness Shopping center located in Wayne, New Jersey with a new loan held by ConnectOne Bank in the amount of $25,000,000. This loan is interest-only based on a fixed interest rate of 5% and has a term of three years with a maturity date of August 1, 2025. Additionally, an interest reserve escrow was established at closing representing twelve months of interest of $1,250,000, which can be used to pay monthly interest on this loan with a requirement to replenish the escrow account back to $1,250,000 when the balance in the escrow account is reduced to three months of interest. This refinancing resulted in (i) annual debt service savings of approximately $340,000 due to interest-only payments; (ii) an increase in the interest rate from a fixed interest rate of 3.625% to a fixed interest rate of 5%; and (iii) net refinancing proceeds of approximately $1.1 million which can be used for capital expenditures and general corporate purposes. As part of the refinancing, Wayne PSC terminated the interest rate swap contract on the underlying loan resulting in a realized gain on the swap breakage of approximately

$1.4 million (See Note 4 for additional details.) As of January 31, 2023, the interest reserve escrow account has a balance of approximately $611,000.

On December 30, 2021, FREIT ~~Maryland~~ refinanced its $14.4 million loan (which would have matured on February 1, 2022) ~~on its Boulders property located in Rockaway, New Jersey~~ with a new loan held by ConnectOne Bank in the amount of $7,500,000, with additional funding available to be drawn upon in the amount of $7,500,000 for corporate needs inclusive of $250,000 for legal fees potentially incurred by the lender related to the lis pendens on this property resulting from the legal proceeding between FREIT Maryland and certain of its affiliates and Sinatra Properties, LLC (See Note 6).needs. This loan is interest-only and has a maturity date of January 1, 2024 with the option of FREIT ~~Maryland~~ to extend for one year from the maturity date, subject to certain provisions of the loan agreement. This refinancing will provide annual debt service savings of approximately $1,173,000 as a result of the reduction in the principal amount, a reduction in the annual interest rate from a fixed rate of 5.37% to a fixed rate of 2.85% and interest-only payments being required under this new loan. As of January 31, 2023, $7,500,000 of this loan was drawn and outstanding.

~~FREIT Maryland’s~~FREIT’s revolving line of credit provided by the Provident Bank was renewed for a three-year term ending on October 31, 2023. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on ~~FREIT Maryland’s~~FREIT’s Franklin Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. The total line of credit is $13 million and the interest rate on the amount outstanding is based on a floating interest rate of prime minus 25 basis points with a floor of 3.75%. As of January 31, ~~2022~~2023 and October 31, ~~2021,~~2022, there was no amount outstanding and $13 million was available under the line of credit.

~~In accordance with certain loan agreements,~~While FREIT ~~Maryland may be required~~intends to ~~meet~~renew or ~~maintain certain financial covenants throughout the term of the loan. As a result of the COVID-19 pandemic, rent losses and the planning for a potential redevelopment of~~refinance its ~~shopping center,~~debt obligations as of October 31, 2021, Wayne PSC was not, and currently is not, in compliance with a look back debt service coverage ratio loan covenant contained in the mortgage loan agreement held by People’s United Bank. As of January 31, 2022, this loan has a balance of approximately $22.4 million. Although the Company continues to make its required debt service payments in accordance with the loan agreement, it is unable to comply with this covenant. As such, the bank could exercise its remedies under the loan agreement including, among other things, requiring a partial or full repayment of the loan with a balance of approximately $22.4 million as of January 31, 2022. The Company is currently working with the lender to remediate this covenant default. As of the date of the filing of this quarterly report on Form 10-Q, the bank has not declared this loan to be in default. Until such time as a definitive agreement is entered into,they become due, there can be no assurance ~~the loan covenant~~that it will be ~~amended and~~successful or, if successful, that the ~~bank~~new terms will ~~not declare this loan~~be similar to ~~be in default.~~

The following table shows the estimated fair value and net carrying value of ~~FREIT Maryland’s~~FREIT’s long-term debt at January 31, ~~2022~~2023 and October 31, ~~2021:~~

Fair values are estimated based on market interest rates at January 31, ~~2022~~2023 and October 31, ~~2021~~2022 and on a discounted cash flow analysis. Changes in assumptions or estimation methods may significantly affect these fair value estimates. The fair value is based on observable inputs (level 2 in the fair value hierarchy as provided by authoritative guidance).

ASC 280-10, "Disclosures about Segments of an Enterprise and Related Information", establishes standards for reporting financial information about operating segments in interim and annual financial reports and provides for a "management approach" in identifying the reportable segments. FREIT ~~Maryland~~ has determined that it has 2two reportable segments: commercial properties and residential properties. These reportable segments offer different types of space, have different types of tenants, and are managed separately because each requires different operating strategies and management expertise. The commercial segment is comprised of five (5) properties, excluding the Rotunda Property, the Westridge Square Property and the Damascus Property, which were sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. The residential segment is comprised of six (6) properties, excluding the Icon at the Rotunda Property, which was sold as part of the Maryland Properties on December 30, 2021. (See Note 7 for further details.)

The accounting policies of the segments are the same as those described in Note 1 in ~~FREIT Maryland’s~~FREIT’s Annual Report on Form 10-K for the fiscal year ended October 31, ~~2021.~~2022. The chief operating and decision-making group responsible for oversight and strategic decisions of ~~FREIT Maryland's~~FREIT's commercial segment, residential segment and corporate/other is comprised of ~~FREIT Maryland’s~~FREIT’s Board.

FREIT, ~~Maryland,~~ through its chief operating and decision making group, assesses and measures segment operating results based on net operating income ("NOI"). NOI, a standard used by real estate professionals, is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes: deferred rents (straight lining), depreciation, financing costs and other items. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP, and is not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

Index

Page 15

~~Page 17~~

Real estate rental revenue, operating expenses, NOI and recurring capital improvements for the reportable segments are summarized below and reconciled to condensed consolidated net income attributable to common equity for the three ~~month periods~~months ended January 31, ~~2022~~2023 and ~~2021.~~2022. Asset information is not reported since FREIT ~~Maryland~~ does not use this measure to assess performance.

Three Months Ended
January 31,
2022
2021
(In Thousands of Dollars)
Real estate rental revenue:
Commercial
$
4,321
$
6,351
Residential
6,338
6,609
Total real estate rental revenue
10,659
12,960

Real estate operating expenses:
Commercial
2,685
2,627
Residential
2,641
2,664
Total real estate operating expenses
5,326
5,291

Net operating income:
Commercial
1,636
3,724
Residential
3,697
3,945
Total net operating income
$
5,333
$
7,669

Recurring capital improvements - residential
$
(48
)

$
(82
)

	Three Months Ended
	January 31,
	2023			2022
	(In Thousands of Dollars)
Real estate rental revenue:
Commercial	$	2,254		$	4,321
Residential		4,753			6,338
Total real estate rental revenue		7,007			10,659

Real estate operating expenses:
Commercial		1,247			2,685
Residential		2,140			2,641
Total real estate operating expenses		3,387			5,326

Net operating income:
Commercial		1,007			1,636
Residential		2,613			3,697
Total net operating income	$	3,620		$	5,333


Recurring capital improvements - residential	$	(145	)	$	(48	)


Reconciliation to condensed consolidated net income attributable to common equity:
Segment NOI	$	3,620		$	5,333
Deferred rents - straight lining		(28	)		(10	)
Investment income		189			26
General and administrative expenses		(827	)		(1,327	)
Loss on investment in tenancy-in-common		(67	)		(124	)
Depreciation		(722	)		(1,820	)
Net (loss) gain on sale of Maryland properties		(243	)		70,003
Financing costs		(1,876	)		(2,928	)
Net income		46			69,153
Net loss (income) attributable to noncontrolling interests in subsidiaries		373			(23,376	)
Net income attributable to common equity	$	419		$	45,777

Reconciliation to condensed consolidated net income attributable to common equity:
Segment NOI
$
5,333
$
7,669
Deferred rents - straight lining
(10
)
(206
)
Investment income
26
30
General and administrative expenses
(1,327
)
(1,260
)
Loss on investment in tenancy-in-common
(124
)
(27
)
Depreciation
(1,820
)
(2,295
)
Net gain on sale of Maryland properties
70,003
0-
Financing costs
(2,928
)
(3,132
)
Net income
69,153
779
Net income attributable to noncontrolling interests in subsidiaries
(23,376
)
(221
)
Net income attributable to common equity
$
45,777
$
558

Note 12 – Income taxes:

FREIT ~~Maryland~~ has elected to be treated as a REIT for federal income tax purposes and as such intends to distribute at least 90% of its ordinary taxable income (to maintain its status as a REIT) ~~and 100% of its capital gains~~ to its stockholders as dividends for the fiscal year ending October 31, ~~2022.~~2023. FREIT ~~Maryland~~ distributed ~~99%~~approximately 143.8% of its ordinary taxable income and 100% of its capital gains from the sale of the Maryland Properties to its stockholders as dividends for the fiscal year ended October 31, ~~2021.~~2022. Accordingly, no provision for federal or state income taxes related to such ordinary taxable income and such gains were recorded in ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for the three months ended January 31, ~~2022~~2023 and ~~2021.~~2022.

As of January 31, ~~2022,~~2023, FREIT ~~Maryland~~ had no material uncertain income tax positions. The tax years subsequent to and including the fiscal year ended October 31, ~~2018~~2019 remain open to examination by the major taxing jurisdictions.

Index

Page 16

~~Page 18~~

Note 13 – Equity ~~incentive plan:~~Incentive Plan:

As of January 31, ~~2022,~~2023, 442,060 shares are available for issuance under the ~~Plan.~~FREIT Equity Incentive Plan (the “Plan”).

The following table summarizes stock option activity for the three ~~month periods~~months ended January 31, ~~2022~~2023 and ~~2021:~~2022:

Three Months Ended
January 31,
2022
Three Months Ended
January 31,
2021
No. of Options
Exercise
No. of Options
Exercise
Outstanding
Price
Outstanding
Price
Options outstanding at beginning of period
310,740
$
18.35
310,740
$
18.35
Options granted during period
0-
0-
0-
0-
Options forfeited/cancelled during period
0-
0-
0-
0-
Options outstanding at end of period
310,740
$
18.35
310,740
$
18.35
Options vested and expected to vest
309,450
308,310
Options exercisable at end of period
292,540
276,340

	Three Months Ended						Three Months Ended
	January 31, 2023						January 31, 2022
	No. of Options			Weighted Average			No. of Options		Weighted Average
	Outstanding			Price			Outstanding		Price
Options outstanding at beginning of period		126,140		$	10.64			310,740	$	18.35
Options granted during period		—			—			—		—
Options forfeited/cancelled during period		—			—			—		—
Options exercised during period		(112,900	)		(10.86	)		—		—
Options outstanding at end of period		13,240		$	8.74			310,740	$	18.35
Options vested and expected to vest		11,950						309,450
Options exercisable at end of period		3,640						292,540

For the three ~~month periods~~months ended January 31, ~~2022~~2023 and ~~2021,~~2022, compensation expense related to stock options vested amounted to approximately $5,000 and ~~$12,000,~~$5,000, respectively. At January 31, ~~2022,~~2023, there was approximately ~~$25,000~~$7,000 of unrecognized compensation cost relating to outstanding non-vested stock options to be recognized over the remaining weighted average vesting period of approximately ~~1.4~~0.4 years. The aggregate intrinsic value of options vested and expected to vest and options exercisable at January 31, ~~2022~~2023 was approximately ~~$1,706,000~~$81,000 and ~~$1,563,000,~~$17,000, respectively. For the three months ended January 31, 2023, 112,900 options were exercised for an aggregate amount of approximately $1.2 million.

Note 14 – Deferred fee plan:

On September 4, 2014, the Board approved amendments, effective November 1, 2014, to the FREIT ~~Maryland~~ Deferred Fee Plan for its executive officers and directors, one of which provides for the issuance of share units payable in FREIT ~~Maryland~~ shares in respect of (i) deferred amounts of all director fees on a prospective basis; (ii) interest on director fees deferred prior to November 1, 2014 (payable at a floating rate, adjusted quarterly, based on the average 10-year Treasury Bond interest rate plus 150 basis points); and (iii) dividends payable in respect of share units allocated to participants in the Deferred Fee Plan as a result of deferrals described above. The number of share units credited to a participant’s account ~~will be~~was determined by the closing price of FREIT ~~Maryland~~ shares on the date as set forth in the Deferred Fee Plan.

For the three months ended January 31, 2023 and 2022, the aggregate amounts of deferred director fees together with related interest and dividends were approximately $26,500 and $61,600, respectively, which have been paid through the issuance of 1,630 and 2,496 vested FREIT share units, respectively, based on the closing price of FREIT shares on the dates as set forth in the Deferred Fee Plan. For the three months ended January 31, 2023 and 2022, FREIT has charged as expense approximately $26,500 and $43,800, respectively, representing deferred director fees and interest, and the balance of approximately $0 and $17,000, respectively, representing dividends payable in respect of share units allocated to Plan participants, has been charged to equity.

On November 4, 2021 (the “Adoption Date”), the Board approved the termination of the Deferred Fee Plan resulting in the termination of the deferral of fees on December 31, 2021 with any subsequent fees earned by a participant being paid in cash. Consistent with the termination of the Deferred Fee Plan, payment related to each participant’s cash account (in the form of a cash lump sum payment) and share unit account (in the form of the issuance of common stock) (collectively “the Deferred Fee Plan Termination Payment”) must be made to each participant no earlier than twelve (12) months and one day after, and no later than twenty-four (24) months, after the Adoption Date. Any interest earned on the participant’s cash account along with dividends (if any) earned on share units, will continue to accrue in share units on each participant’s account until final payment is made.

~~For~~ On November 3, 2022, the ~~three month periods ended January 31, 2022 and 2021,~~Board determined that the ~~aggregate amounts of deferred director fees together with related interest and dividends were approximately $61,600 and $118,100, respectively, which have been paid through~~Deferred Fee Plan Termination Payment shall be made to the ~~issuance of 2,496 and 6,919 vested FREIT Maryland share units, respectively, based on the closing price of FREIT Maryland shares on the dates as set forth~~participants in the Deferred Fee ~~Plan.~~Plan on January 20, 2023.

~~For the three month periods ended January~~As of October 31, 2022, ~~and 2021, FREIT Maryland has charged as expense~~the total payment related to each participant’s cash account was approximately ~~$43,800 and $110,200, respectively, representing deferred director~~$2,317,000 (consisting of approximately $1,366,000 of cumulative fees and ~~interest, and the balance~~approximately $951,000 of ~~approximately $17,000 and $7,900, respectively, representing dividends payable in respect of share units allocated to Plan participants, has~~accrued interest) which had been ~~charged to equity.~~

~~The Deferred Fee Plan, as amended, provided that cumulative fees together with accrued interest~~ deferred as of November 1, 2014 and was included in the “Deferred director compensation payable” in the condensed consolidated balance sheet as of October 31, 2022. On January 20, 2023, in accordance with the Deferred Fee Plan Termination Payment, this amount was paid in ~~a lump sum or~~full to each respective participant with no remaining balance due as of January 31, 2023. Additionally, payment related to each participant’s share unit account in ~~annual installments over a period not to exceed 10 years, at~~ the ~~election~~form of the ~~participant.~~issuance of stock was made to each respective participant resulting in the issuance of 274,509 shares of common stock from the 274,509 vested share units. As of January 31, ~~2022 and October 31, 2021, approximately $1,454,000~~2023, there were no remaining vested share units to be paid in the form of ~~fees has been deferred together with accrued interest~~the issuance of ~~approximately $1,021,000.~~stock.

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Note 15 – Rental Income:

Commercial ~~tenants:~~tenants:

Fixed lease income under our commercial operating leases generally includes fixed minimum lease consideration, which is accrued on a straight-line basis over the terms of the leases. Variable lease income includes consideration based on sales, as well as reimbursements for real estate taxes, maintenance, insurance and certain other operating expenses of the properties.

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Minimum fixed lease consideration (in thousands of dollars) under non-cancelable tenant operating leases for each of the next five years and thereafter, excluding variable lease consideration and rents from tenants for which collectability is deemed to be constrained, for the years ending October 31, as of January 31, ~~2022,~~2023, is as follows:

Year Ending October 31,	Amount		Amount
2022*	$	5,782
2023		5,191	$	5,685
2024		4,110		4,886
2025		3,413		4,175
2026		2,666		3,406
2027				2,248
Thereafter		3,362		4,125
Total	$	24,524	$	24,525

*Amount represents full fiscal year and excludes rents from the Rotunda Property, the Westridge Square Property and the Damascus Property sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively.

The above amounts assume that all leases which expire are not renewed and, accordingly, neither month-to-month nor rentals from replacement tenants are included.

Minimum future rentals do not include contingent rentals, which may be received under certain leases on the basis of percentage of reported tenants' sales volume. Rental income that is contingent on future events is not included in income until the contingency is resolved. Contingent rentals included in income for the three ~~month periods~~months ended January 31, ~~2022~~2023 and ~~2021~~2022 were not material.

Residential ~~tenants:~~tenants:

Lease terms for residential tenants are usually one to two years.

Note 16 – ~~COVID-19 Pandemic:~~Subsequent Events:

~~The international spread of COVID-19 was declared~~Effective February 1, 2023, FREIT entered into a ~~global pandemic~~loan extension and modification agreement with Valley National Bank on its loan secured by the ~~World Health Organization~~Westwood Plaza shopping center in Westwood, New Jersey with a then outstanding balance of approximately $16,864,361. Under the terms and conditions of this loan extension and modification, the maturity date of the loan will be extended for a term of one (1) year from February 1, 2023 to February 1, 2024 with the option of FREIT to extend for one additional year from the maturity date, subject to certain provisions of the loan agreement. The loan will be payable based on monthly installments of approximately $157,347 based on a fixed rate of interest of 7.5%. Additionally, FREIT funded an interest reserve escrow account (“Escrow”) at closing representing the annualized principal and interest payments for one (1) year, amounting to approximately $1,888,166. This Escrow is held at Valley National Bank and in the event of a default on this loan, the bank shall be permitted to use the proceeds from the escrow account to make monthly debt service payments on the loan.

On March 9, 2023, in accordance with FREIT’s Equity Incentive Plan, the Compensation Committee of the FREIT Board of Directors (the “Board”) recommended to the Board and the Board approved that for services rendered and to be rendered in 2023, in lieu of cash compensation in the amount of $20,000, each director was awarded shares of Common Stock, $0.01 par value, (the “Shares”) in FREIT. Based on the closing price of FREIT’s Shares on March ~~11, 2020. Beginning in March 2020~~9, 2023 of $15.50 per Share, the Board has approved an award of 1,290 Shares of FREIT to each director serving on FREIT’s Board. Additionally, the Compensation Committee recommended to the Board and ~~throughout most of 2020, many states in~~ the U.S., including New Jersey, New York and Maryland, where our properties were located, implemented stay-at-home and shut down orders for all "non-essential" business and activity in an aggressive effortBoard approved other adjustments to ~~mitigate~~ the spread of COVID-19. Over the past year, vaccinations for the COVID-19 virus were widely distributed among the general U.S. population which resulted in loosened restrictions previously mandated on our tenants identified as nonessential. However, the potential emergence of vaccine-resistant variants of COVID-19 could trigger restrictionscompensation to be ~~put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. As the impact of the pandemic evolves, it continues~~paid to ~~cause uncertainty and volatility in the financial markets. The COVID-19 pandemic~~directors and the actions taken by individuals, businesses and government authorities to reduce its spread have caused substantial lost business revenue, changes in consumer behavior and large reductions in liquidity and fair valueexecutive officers of ~~many assets.~~

Despite the COVID-19 pandemic and preventive measures taken to mitigate the spread, our residential properties have continued to generate cash flow. At our commercial properties, with the exception of grocery stores and other "essential" businesses, many of our retail tenants have been adversely affected by the previously mandated shut downs and the continued lingering impact to consumer sentiment and preferences for safety amid the reemergence of other COVID-19 variants. The Company is closely monitoring changes in the collectability assessment of its tenant receivables as a result of certain tenants suffering adverse financial consequences related to the COVID-19 pandemic. For the three months ended January 31, 2022 and 2021, rental revenue deemed uncollectible of approximately $0.1 million and $0.6 million (with a consolidated impact to FREIT Maryland of approximately $0.1 million and $0.4 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. During the period beginning March 2020 through October 31, 2021, FREIT Maryland has applied, net of amounts subsequently paid back by tenants, an aggregate of approximately $397,000 of security deposits from its commercial tenants to outstanding receivables due. For the three months ended January 31, 2022, there were no security deposits from its commercial tenants applied to outstanding receivables due. On a case by case basis, FREIT Maryland has offered rent abatements totaling approximately $9,000 and $50,000 (with a consolidated impact to FREIT Maryland of approximately $9,000 and $31,000) for the three months ended January 31, 2022 and 2021, respectively. There were no significant deferrals of rent over a specified time period offered to its commercial tenants for the three months ended January 31, 2022 and 2021. FREIT Maryland currently remains in active discussions and negotiations with these impacted retail tenants.

For the three months ended January 31, 2022, we have experienced a positive cash flow from operations with cash provided by operations of approximately $2.9 million. This could change based on the duration of the pandemic, which is uncertain. We believe that our cash balance as of January 31, 2022 of approximately $95.4 million coupled with a $13 million available line of credit (available through October 31, 2023, see Note 9) and the additional $7.5 million in funds available to be drawn upon on the Boulders loan (See Note 9 for additional details) will provide us with sufficient liquidity for at least the next twelve months from the filing of this quarterly report on Form 10-Q.

The extent of the effects of COVID-19 on our business, results of operations, cash flows, value of our real estate assets and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty.FREIT.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Identifying Important Factors That Could Cause First Real Estate Investment Trust of New Jersey, Inc.’s (“~~FREIT Maryland”~~FREIT”) Actual Results to Differ From Those Projected in Forward Looking Statements.

Readers of this discussion are advised that the discussion should be read in conjunction with the unaudited condensed consolidated financial statements of FREIT ~~Maryland~~ (including related notes thereto) appearing elsewhere in this Form 10-Q, and the consolidated financial statements included in ~~FREIT Maryland’s~~FREIT’s most recently filed Form 10-K. Certain statements in this discussion may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect ~~FREIT Maryland’s~~FREIT’s current expectations and are based on estimates, projections, beliefs, data, methods and assumptions of management of FREIT ~~Maryland~~ at the time of such statements regarding future results of operations, economic performance, financial condition and achievements of FREIT, ~~Maryland,~~ and do not relate strictly to historical or current facts. These forward-looking statements are identified through the use of words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning. Forward-looking statements involve risks and uncertainties in predicting future results and conditions.

Although FREIT ~~Maryland~~ believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties. These and certain other uncertainties, factors and risks, including those risk factors set forth and further described in Part I, Item 1A entitled “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2021,~~2022, and other risks described in our subsequent filings with the SEC, may cause our actual results to differ materially from those projected. Such factors include, but are not limited to, the following: general economic and business conditions, including the purchase of retail products over the Internet, which will, among other things, affect demand for rental space, the availability of prospective tenants, lease rents, the financial condition of tenants and the default rate on leases, operating and administrative expenses and the availability of financing; adverse changes in ~~FREIT Maryland’s~~FREIT’s real estate markets, including, among other things, competition with other real estate owners, competition confronted by tenants at ~~FREIT Maryland’s~~FREIT’s commercial properties; governmental actions and initiatives; environmental/safety requirements; risks of real estate development and acquisitions; and ~~on-going negative effects of the COVID-19 pandemic on our properties~~public health crises, epidemics and ~~tenants, and generally on our real estate assets and the real estate markets in which we operate, and the global, U.S. and local economies.~~pandemics. The risks with respect to the development of real estate include: increased construction costs, inability to obtain construction financing, or unfavorable terms of financing that may be available, unforeseen construction delays and the failure to complete construction within budget.

OVERVIEW

FREIT ~~Maryland~~ is an equity real estate investment trust (“REIT”) that is self-administered and externally managed. FREIT ~~Maryland~~ owns a portfolio of residential apartment and commercial properties. ~~FREIT Maryland’s~~FREIT’s revenues consist primarily of rental income and other related revenues from its residential and commercial properties and additional rents derived from operating commercial properties. ~~FREIT Maryland’s~~FREIT’s properties are primarily located in northern New Jersey and New York.

~~COVID-19 Pandemic~~The economic and financial environment: The international spread of COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Beginning in March 2020 and throughout most of 2020, many states in the U.S., including New Jersey, New York and Maryland, where our properties were located, implemented stay-at-home and shut down orders for all "non-essential" business and activity in an aggressive effort to mitigate the spread of COVID-19. Over the past year, vaccinations for the COVID-19 virus were widely distributed among the general U.S. population which resulted in loosened restrictions previously mandated on our tenants identified as nonessential. However, the potential emergence of vaccine-resistant variants of COVID-19 could trigger restrictions to be put back in place. Such restrictions may include mandatory business shut-downs, reduced business operations and social distancing requirements. The COVID-19 pandemic and the actions taken by individuals, businesses and government authorities to reduce its spread have caused substantial lost business revenue, changes in consumer behavior and large reductions in liquidity and fair value of many assets.

As the impact of the pandemic evolves, it continues to cause uncertainty and volatility in the financial markets. Many U.S. industries and businesses were negatively affected and millions of people filed for unemployment resulting in the U.S. unemployment rate rising to 14.7% in April 2020, which was the highest recorded rate since the Great Depression. Since April 2020, the U.S unemployment rate has declined to 4% as of January 2022, as many businesses continue to reopen and rehire employees following many of the COVID-19 mandated shut down orders being lifted. However, the jobless rate remains above the pre-pandemic levels of about 3.5%. Additionally,2023, the annual inflation rate ~~in the U.S. has accelerated to 7.5% in January 2022, the highest since 1982,~~is at 6.4%, which is primarily being driven by soaring food prices and energy costs, labor shortages and supply ~~disruptions.~~

~~Despite~~disruptions, while the ~~COVID-19 pandemic and preventive measures taken~~U.S. unemployment rate decreased to ~~mitigate~~3.4%. Though inflation still remains at a high level, it is showing signs of slowing down as the ~~spread, our residential properties continued~~inflation rate has come down from a 40-year high of 9.1% in June 2022. The Federal Reserve continues to ~~generate cash flow. At our commercial properties, with~~raise interest rates in an effort to lower inflation. However, the ~~exception of grocery stores and other "essential" businesses, many of our retail tenants have been adversely affected by the previously mandated shut downs and the continued lingering impact~~pace at which it may continue to ~~consumer~~

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~~sentiment and preferences for safety amid the reemergence of other COVID-19 variants. The Company~~do so is ~~closely monitoring changes~~uncertain leading to uncertainties in the ~~collectability assessment of its tenant receivables as~~financing market and a result of certain tenants suffering adverse financial consequences related to the COVID-19 pandemic. For the three months ended January 31, 2022 and 2021, rental revenue deemed uncollectible of approximately $0.1 million and $0.6 million (with a consolidated impact to FREIT Maryland of approximately $0.1 million and $0.4 million), respectively, was classified as a reduction in rental revenue based on our assessment of the probability of collecting substantially all of the remaining rents for certain tenants. During the period beginning March 2020 through October 31, 2021, FREIT Maryland has applied, net of amounts subsequently paid back by tenants, an aggregate of approximately $397,000 of security deposits from its commercial tenants to outstanding receivables due. For the three months ended January 31, 2022, there were no security deposits from its commercial tenants applied to outstanding receivables due. On a case by case basis, FREIT Maryland has offered rent abatements totaling approximately $9,000 and $50,000 (with a consolidated impact to FREIT Maryland of approximately $9,000 and $31,000) for the three months ended January 31, 2022 and 2021, respectively. There were no significant deferrals of rent over a specified time period offered to its commercial tenants for the three months ended January 31, 2022 and 2021. FREIT Maryland currently remains in active discussions and negotiations with these impacted retail tenants.volatile economy.

For the three months ended January 31, 2022, we have experienced a positive cash flow from operations with cash provided by operations of approximately $2.9 million. This could change based on the duration of the pandemic, which is uncertain. We believe that our cash balance as of January 31, 2022 of approximately $95.4 million coupled with a $13 million available line of credit (available through October 31, 2023, see Note 9 to FREIT Maryland’s condensed consolidated financial statements for further details) and the additional $7.5 million in funds available to be drawn upon on the Boulders loan (See Note 9 to FREIT Maryland’s condensed consolidated financial statements for further details) will provide us with sufficient liquidity for at least the next twelve months from the filing of this quarterly report on Form 10-Q.

Residential Properties: ~~While our~~Our residential properties continue to generate positive cash flow while average rents on turned units (apartments which were vacated and then re-leased to new tenants) has continued to increase across the portfolio. Additionally, the rate of increase on renewals for existing tenants has continued to be robust, but could begin to soften in the current year. These increases should meaningfully contribute to FREIT’s income over time but it is uncertain what impact ~~COVID-19 and~~ the significant rise in inflation and rising interest rates may have on these properties over the next ~~year is uncertain.~~year.

Commercial Properties: ~~There continues to be uncertainty~~While our retail properties have stabilized from the impact of the COVID-19 pandemic, certain of our properties still have not attained pre-pandemic operating levels despite some recovery in ~~the retail environment that could have an adverse impact on FREIT Maryland’s retail tenants, which could have an adverse impact on FREIT Maryland. The impact COVID-19~~brick and mortar retail. Additionally, the significant rise in inflation ~~may~~and rising interest rates could have an impact on the operating and financial performance of our commercial ~~properties is currently uncertain.~~

~~Maryland Property Dispositions:~~

On November 22, 2021, certain affiliates (the “Maryland Sellers”) of FREIT Maryland entered into a Purchase and Sale Agreement (the “Maryland Purchase and Sale Agreement”) with MCB Acquisition Company, LLC (the “Maryland Purchaser”), a third party, pursuant to which the Sellers agreed to sell three properties to the Maryland Purchaser. The properties consisted of retail and office space and a residential apartment community owned by Grande Rotunda, LLC (the “Rotunda Property”), a shopping center owned by Damascus Centre, LLC (the “Damascus Property”), and a shopping center owned by WestFREIT Corp. (the “Westridge Square Property”). FREIT Maryland owns 100% of its subsidiary, WestFREIT Corp. (“WestFREIT”), a 60% interest in Grande Rotunda, LLC (“Grande Rotunda”), the joint venture that owned the Rotunda Property, and a 70% interest in Damascus Centre, LLC (“Damascus Centre”), the joint venture that owned the Damascus Property.

The original purchase price for the Rotunda Property, the Damascus Property and the Westridge Square Property (collectively the “Maryland Properties”) under the Maryland Purchase and Sale Agreement was reduced by $2,723,000 from $267,000,000 to $248,750,269, after giving effect to the $15,526,731 escrow deposit described below. This reduction in the sales price was to account for improvements and repairs to the Maryland Properties and miscellaneous items identified by the Maryland Purchaser in the course of its due diligence inspection. Additionally, the Maryland Purchaser was obligated under the Maryland Purchase and Sale Agreement to deposit a total of $15,526,731 in escrow with respect to certain leases at the Maryland Properties, which have not been executed or where the rent commencement date has not occurred or economic obligations of the Sellers under certain leases remain unpaid. Although there can be no assurance, a portion of the $15,526,731 escrow deposit (the “Maryland Purchaser Escrow Payment”) may be paid to the Sellers depending upon the outcome of construction and leasing activities at the Maryland Properties. The Maryland Purchaser Escrow Payment Agreement provides for among other things, monthly disbursements from escrow to the Maryland Purchaser related to the aforementioned tenant lease agreements until the earlier of (i) the rent commencement date of the respective tenant lease agreements or (ii) 5-years from the date of the agreement. Release and amounts of escrowed funds to FREIT Maryland, generally, is contingent on the success and timing of future leasing activities at the Maryland Properties.

The sale of the Maryland Properties having a total net book value of $171.8 million resulted in net proceeds from the sale of approximately $51.6 million, after payment of related mortgage debt in the amount of $155.8 million and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on the Damascus Property loan, payment of loans (including interest) to each of the partners in Grande Rotunda in the amount of approximately $31 million and certain transactional expenses and transfer taxes including a brokerage fee due to Hekemian & Co. of approximately $6.2 million. The sale of the Maryland Properties resulted in a net gain of approximately $70 million (with a consolidated impact to FREIT Maryland of approximately $46.3 million) which includes approximately $9.3 million of proceeds anticipated to be released from the $15,526,731 of funds held in escrow (included in “Funds held in post-closing escrow” on the accompanying condensed consolidated balance sheet as of January 31, 2022), a write-off of the straight-line rent receivable of approximately $2.9 million and a write-off of unamortized lease commissions of approximately $1.7 million. See Note 7 to FREIT Maryland’s condensed consolidated financial statements for additional details on the sale of these three properties.

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Debt Financing Availability: Financing has been available to FREIT ~~Maryland~~ and its affiliates. ~~The lis pendens filed in connection with the legal proceeding between FREIT Maryland~~Certain recent refinancings and ~~certain of its affiliates and Sinatra Properties, LLC~~loan modifications/extensions have been ~~dismissed~~at higher interest rates and for shorter terms.

Effective February 1, 2023, FREIT entered into a loan extension and modification agreement with Valley National Bank on its loan secured by the ~~Court pursuant to the Order entered on February 4, 2022 discussed elsewhere~~Westwood Plaza shopping center in this report. (See Note 6 to FREIT Maryland’s condensed consolidated financial statements). Accordingly, subject to the possible challenge of the Court’s Order by Sinatra Properties, LLC the future sale or financing of these properties is not affected by the lis pendens.

~~On December 30, 2021, FREIT Maryland refinanced its $14.4 million loan (which would have matured on February 1, 2022) on its Boulders property located in Rockaway,~~Westwood, New Jersey with a ~~new~~then outstanding balance of approximately $16,864,361. Under the terms and conditions of this loan ~~held by ConnectOne Bank in~~extension and modification, the amount of $7,500,000, with additional funding available to be drawn upon in the amount of $7,500,000 for corporate needs inclusive of $250,000 for legal fees potentially incurred by the lender related to the lis pendens on this property resulting from the legal proceeding between FREIT Maryland and certain of its affiliates and Sinatra Properties, LLC (See Note 6 to FREIT Maryland’s condensed consolidated financial statements). This loan is interest-only and has a maturity date of ~~January~~the loan will be extended for a term of one (1) year from February 1, 2023 to February 1, 2024 with the option of FREIT ~~Maryland~~ to extend for one additional year from the maturity date, subject to certain provisions of the loan agreement. ~~This refinancing~~The loan will ~~provide annual debt service savings~~ be payable based on monthly installments

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of approximately ~~$1,173,000 as a result of the reduction in the principal amount, a reduction in the annual interest rate from~~$157,347 based on a fixed rate of ~~5.37%~~interest of 7.5%. Additionally, FREIT funded an interest reserve escrow account (“Escrow”) at closing representing the annualized principal and interest payments for one (1) year, amounting to approximately $1,888,166. This Escrow is held at Valley National Bank and in the event of a ~~fixed rate of 2.85% and interest-only~~default on this loan, the bank shall be permitted to use the proceeds from the escrow account to make monthly debt service payments ~~being required under this new~~on the loan.

~~In accordance with certain~~On August 19, 2022, Westwood Hills, LLC exercised its right, pursuant to the loan ~~agreements, FREIT Maryland may be required~~agreement, to ~~meet or maintain certain financial covenants throughout~~extend the term of its $25 million loan on its property located in Westwood, New Jersey, for an additional six (6) months from an initial maturity date of October 1, 2022 to a new maturity date of April 1, 2023. On March 1, 2023, Westwood Hills, LLC exercised its right, pursuant to the ~~loan. As a result of~~loan agreement, to extend the ~~COVID-19 pandemic, rent losses and the planning for a potential redevelopment~~term of its ~~shopping center, as~~loan, for an additional six (6) months to a new maturity date of October ~~31, 2021, Wayne PSC was not,~~1, 2023 on the same terms and ~~currently is not, in compliance with a look back debt service coverage ratio loan covenant contained~~conditions as stated in the ~~mortgage~~ loan ~~agreement held by People’s United Bank.~~agreement. As of January 31, ~~2022,~~2023, $25,000,000 of this loan has a balance of approximately $22.4 million. Although the Company continues to make its required debt service payments in accordance with the loan agreement, it is unable to comply with this covenant. As such, the bank could exercise its remedies under the loan agreement including, among other things, requiring a partial or full repayment of the loan with a balance of approximately $22.4 million as of January 31, 2022. The Company is currently working with the lender to remediate this covenant default. As of the date of the filing of this quarterly report on Form 10-Q, the bank has not declared this loan to be in default. Until such time as a definitive agreement is entered into, there can be no assurance the loan covenant will be amendedwas drawn and outstanding and the ~~bank will not declare this loan to be in default.~~interest rate was 8.37%.

Operating Cash Flow: FREIT ~~Maryland~~ expects that cash provided by operating activities and cash reserves will be adequate to cover mandatory debt service payments (including payments of interest, but excluding balloon payments, which are expected to be refinanced and/or extended), real estate taxes, recurring capital improvements at its properties and other needs to maintain its status as a REIT for at least a period of one year from the date of filing of this quarterly report on Form 10-Q.

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SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES

Pursuant to the SEC disclosure guidance for "Critical Accounting Policies," the SEC defines Critical Accounting Policies as those that require the application of management's most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, the preparation of which takes into account estimates based on judgments and assumptions that affect certain amounts and disclosures. Accordingly, actual results could differ from these estimates. The accounting policies and estimates used, which are outlined in Note 1 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended October 31, ~~2021,~~2022, have been applied consistently as of January 31, ~~2022,~~2023, and for the three months ended January 31, ~~2022~~2023 and ~~2021.~~2022. We believe that the following accounting policies or estimates require the application of management's most difficult, subjective, or complex judgments.

Revenue Recognition: Base rents, additional rents based on tenants' sales volume and reimbursement of the tenants' share of certain operating expenses are generally recognized when due from tenants. The straight-line basis is used to recognize base rents under leases if they provide for varying rents over the lease terms. Straight-line rents receivable represent unbilled rents receivable to the extent straight-line rents exceed current rents billed in accordance with lease agreements. Before FREIT ~~Maryland~~ can recognize revenue, it is required to assess, among other things, its collectability.

Valuation of Long-Lived Assets: FREIT ~~Maryland~~ assesses the carrying value of long-lived assets periodically, or whenever events or changes in circumstances indicate that the carrying amounts of certain assets may not be recoverable. When FREIT ~~Maryland~~ determines that the carrying value of long-lived assets may be impaired, the measurement of any impairment is based on a projected discounted cash flow method determined by ~~FREIT Maryland's~~FREIT's management. While FREIT ~~Maryland~~ believes that our discounted cash flow methods are reasonable, different assumptions regarding such cash flows may significantly affect the measurement of impairment.

Real Estate Development Costs: It is ~~FREIT Maryland’s~~FREIT’s policy to capitalize pre-development costs, which generally include legal and professional fees and other directly related third-party costs. Real estate taxes and interest costs incurred during the development and construction phases are also capitalized. FREIT ~~Maryland~~ ceases capitalization of these costs when the project or portion thereof becomes operational, or when construction has been postponed. In the event of postponement, capitalization of these costs will recommence once construction on the project resumes.

See Note 2 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for recently issued accounting standards.

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RESULTS OF OPERATIONS

Real estate revenue for the three months ended January 31, ~~2022~~2023 (“Current Quarter”) decreased ~~16.5%~~34.5% to ~~$10,649,000,~~$6,979,000 compared to ~~$12,754,000~~$10,649,000 for the three months ended January 31, ~~2021~~2022 (“Prior Year’s Quarter”). The decrease in revenue for the Current Quarter was primarily attributable to the ~~following: (a) a decrease of approximately $2.3 million attributed to the~~ Maryland Properties sold in the Current Quarter; (b) a decrease of approximately $0.1 million primarily driven by lease termination fees received in the Prior Year’s Quarter from Pet Valu, Inc., a former pet store tenant at the Preakness Shopping Center located in Wayne, New Jersey; offset by (c) an increase from the residential segment, excluding the Icon at the Rotunda Property sold in the Current Quarter, of approximately $0.3 million primarily driven by an increase in the average occupancy rate to 98.9% from 97.3% in the Prior Year’s Quarter.

Net income attributable to common equity (“net income-common equity”) for the Current Quarter was $419,000 ($0.06 per share basic and diluted) compared to $45,777,000 ($6.51 per share basic and $6.45 per share diluted)~~, compared to $558,000 ($0.08 per share basic and diluted),~~ for the Prior Year’s Quarter.

The schedule below provides a detailed analysis of the major changes that impacted net income-common equity for the three months ended January 31, ~~2022~~2023 and ~~2021:~~2022:

NON-GAAP NET INCOME COMPONENTS Three Months Ended
January 31,
2022 2021 Change
(In Thousands of Dollars)
Income from real estate operations:
    Commercial properties $ 1,626 $ 3,518 $ (1,892 )
    Residential properties 3,697 3,945 (248 )
Total income from real estate operations 5,323 7,463 (2,140 )

Financing costs:
Fixed rate mortgages (1,342 ) (1,461 ) 119
Floating rate mortgages (952 ) (1,316 ) 364
Interest rate swap contracts breakage fee (213 ) — (213 )
Other - Corporate interest (58 ) (61 ) 3
Mortgage cost amortization (363 ) (294 ) (69 )
Total financing costs (2,928 ) (3,132 ) 204

Investment income 26 30 (4 )

General & administrative expenses:
    Accounting fees (138 ) (154 ) 16
    Legal and professional fees (713 ) (532 ) (181 )
    Directors fees (273 ) (237 ) (36 )
    Stock option expense (5 ) (12 ) 7
    Corporate expenses (198 ) (325 ) 127
Total general & administrative expenses (1,327 ) (1,260 ) (67 )

Depreciation (1,820 ) (2,295 ) 475
Loss on investment in tenancy-in-common (124 ) (27 ) (97 )
   Adjusted net (loss) income (850 ) 779 (1,629 )

Net gain on sale of Maryland properties 70,003 — 70,003
   Net income 69,153 779 68,374

Net income attributable to noncontrolling interests in subsidiaries (23,376 ) (221 ) (23,155 )

    Net income attributable to common equity $ 45,777 $ 558 $ 45,219

NON-GAAP NET INCOME COMPONENTS	Three Months Ended
	January 31,
	2023			2022			Change
	(In Thousands of Dollars)
Income from real estate operations:
Commercial properties	$	979		$	1,626		$	(647	)
Residential properties		2,613			3,697			(1,084	)
Total income from real estate operations		3,592			5,323			(1,731	)

Financing costs:
Fixed rate mortgages		(1,211	)		(1,342	)		131
Floating rate mortgages		(518	)		(952	)		434
Interest rate swap contracts breakage fee		—			(213	)		213
Other - corporate interest		(26	)		(58	)		32
Mortgage cost amortization		(121	)		(363	)		242
Total financing costs		(1,876	)		(2,928	)		1,052

Investment income		189			26			163

General & administrative expenses:
Accounting fees		(135	)		(138	)		3
Legal and professional fees		(225	)		(713	)		488
Directors fees		(269	)		(273	)		4
Stock compensation expense		(5	)		(5	)		—
Corporate expenses		(193	)		(198	)		5
Total general & administrative expenses		(827	)		(1,327	)		500

Depreciation		(722	)		(1,820	)		1,098
Loss on investment in tenancy-in-common		(67	)		(124	)		57
Adjusted net income (loss)		289			(850	)		1,139

Net (loss) gain on sale of Maryland properties		(243	)		70,003			(70,246	)
Net income		46			69,153			(69,107	)

Net loss (income) attributable to noncontrolling interests in subsidiaries		373			(23,376	)		23,749

Net income attributable to common equity	$	419		$	45,777		$	(45,358	)

The condensed consolidated results of operations for the Current Quarter are not necessarily indicative of the results to be expected for the full year or any other period. The table above includes income from real estate operations, which is a non-GAAP financial measure and is not a measure of operating results or cash flow as measured by GAAP, and is not necessarily indicative of cash available to fund cash needs.

Adjusted net income (loss) ~~income~~ for the Current Quarter was adjusted net ~~loss~~income of ~~$850,000~~$289,000 ($~~0.12~~0.04 per share basic and diluted), compared to adjusted net ~~income~~loss of ~~$779,000~~ ($~~0.11~~850,000) (($0.12) per share basic and diluted), for the Prior Year’s Quarter. Adjusted net income (loss) ~~income~~ is a

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~~Page 25~~

non-GAAP measure, which management believes is a useful and meaningful gauge to investors of our operating performance, since it excludes the impact of unusual and infrequent items specifically: a (loss) gain on sale of Maryland ~~properties in Fiscal 2022.~~Properties.

The ~~decrease~~increase in adjusted net income for the Current Quarter was primarily driven by the following: (a) a decrease ~~of approximately $1.4 million (with a consolidated impact to FREIT Maryland of approximately $0.9 million) attributed to the Maryland Properties sold~~ in ~~the Current Quarter; (b) an increase in general and administrative~~General & Administrative expenses (“G&A”) of approximately ~~$0.1 million~~$500,000 primarily driven by ~~an increase~~a decline in legal costs attributed to the legal proceeding between FREIT ~~Maryland~~ and certain of its affiliates and Sinatra Properties, ~~LLC;~~LLC of approximately $411,000 and a decrease in

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legal costs incurred in the Prior Year’s Quarter of approximately $77,000 related to the sale of the Maryland Properties; (b) an increase in adjusted net income of approximately $444,000 (with a consolidated impact to FREIT of approximately $257,000) attributed to the Maryland Properties sold; (c) an increase in investment income of approximately $163,000 resulting from higher interest rates in the Current Quarter; (d) a decrease in snow removal costs at the commercial properties, excluding the Maryland Properties sold in the Prior Year’s Quarter, of approximately $93,000 (with a consolidated impact to FREIT of approximately $46,000) due to a milder winter compared to the Prior Year’s Quarter; (e) a decrease in depreciation, excluding the Maryland Properties sold in the Prior Year’s Quarter, of approximately $72,000 (with a consolidated impact to FREIT of approximately $24,000) primarily attributed to the write-off of a tenant improvement at the Wayne Preakness Shopping Center in the Prior Year’s Quarter; and (f) a decrease in loss on investment in tenancy-in-common of approximately ~~$0.1 million; (d)~~$57,000; offset by (g) an increase in ~~adjusted net loss at the Preakness Shopping Center~~interest expense of approximately ~~$0.3 million~~$193,000 (with a consolidated impact to FREIT ~~Maryland~~ of approximately $0.1 million) primarily attributed to a decline in revenue of approximately $0.1 million as explained above, an increase in snow removal costs of approximately $0.1 million and an increase in depreciation expense of approximately $0.1 million resulting from the write-off of tenant improvements; offset by (e) an increase of approximately $0.2 million (with a consolidated impact to FREIT Maryland of approximately $0.2 million) from the residential segment, excluding the Maryland Properties sold, primarily$77,000) attributed to the increase in ~~revenue~~the variable interest rate on the Westwood Hills loan as ~~explained above.~~compared to the Prior Year’s Quarter. (Refer to the segment disclosure below for a more detailed discussion of the financial performance of ~~FREIT Maryland’s~~FREIT’s commercial and residential segments.)

SEGMENT INFORMATION

The following table sets forth comparative net operating income ("NOI") data for ~~FREIT Maryland’s~~FREIT’s real estate segments and reconciles the NOI to condensed consolidated net income-common equity for the Current Quarter as compared to the Prior Year’s Quarter (see below for definition of NOI):

Commercial Residential Combined
Three Months Ended Three Months Ended Three Months Ended
January 31, Increase (Decrease) January 31, Increase (Decrease) January 31,
2022 2021 $ % 2022 2021 $ % 2022 2021
(In Thousands) (In Thousands) (In Thousands)
Rental income $ 3,576 $ 4,551 $ (975 ) -21.4% $ 6,197 $ 6,505 $ (308 ) -4.7% $ 9,773 $ 11,056
Reimbursements 727 1,504 (777 ) -51.7% 30 40 (10 ) -25.0% 757 1,544
Other 18 296 (278 ) -93.9% 111 64 47 73.4% 129 360
Total revenue 4,321 6,351 (2,030 ) -32.0% 6,338 6,609 (271 ) -4.1% 10,659 12,960
Operating expenses 2,685 2,627 58 2.2% 2,641 2,664 (23 ) -0.9% 5,326 5,291
Net operating income $ 1,636 $ 3,724 $ (2,088 ) -56.1% $ 3,697 $ 3,945 $ (248 ) -6.3% 5,333 7,669

Average Occupancy % * 68.9% 70.2% -1.3% 98.9% 97.3% 1.6%

Reconciliation to condensed consolidated net income-common equity:
Deferred rents - straight lining (10 ) (206 )
Investment income 26 30
General and administrative expenses (1,327 ) (1,260 )
Loss on investment in tenancy-in-common (124 ) (27 )
Depreciation (1,820 ) (2,295 )
Net gain on sale of Maryland properties 70,003 —
Financing costs (2,928 ) (3,132 )
Net income 69,153 779
Net income attributable to noncontrolling interests in subsidiaries (23,376 ) (221 )
Net income attributable to common equity $ 45,777 $ 558

	Commercial									Residential									Combined
	Three Months Ended									Three Months Ended									Three Months Ended
	January 31,				Increase (Decrease)					January 31,				Increase (Decrease)					January 31,
	2023		2022		$			%		2023		2022		$			%		2023		2022
	(In Thousands)									(In Thousands)									(In Thousands)
Rental income	$	1,592	$	3,576	$	(1,984	)		-55.5%	$	4,658	$	6,197	$	(1,539	)		-24.8%	$	6,250	$	9,773
Reimbursements		637		727		(90	)		-12.4%		9		30		(21	)		-70.0%		646		757
Other		25		18		7			38.9%		86		111		(25	)		-22.5%		111		129
Total revenue		2,254		4,321		(2,067	)		-47.8%		4,753		6,338		(1,585	)		-25.0%		7,007		10,659
Operating expenses		1,247		2,685		(1,438	)		-53.6%		2,140		2,641		(501	)		-19.0%		3,387		5,326
Net operating income	$	1,007	$	1,636	$	(629	)		-38.4%	$	2,613	$	3,697	$	(1,084	)		-29.3%		3,620		5,333

Average Occupancy % *		66.4%		68.9%					-2.5%		96.8%		98.9%					-2.1%

Reconciliation to condensed consolidated net income-common equity:
Deferred rents - straight lining		(28	)		(10	)
Investment income		189			26
Net (loss) gain on sale of Maryland properties		(243	)		70,003
General and administrative expenses		(827	)		(1,327	)
Loss on investment in tenancy-in-common		(67	)		(124	)
Depreciation		(722	)		(1,820	)
Financing costs		(1,876	)		(2,928	)
Net income		46			69,153
Net loss (income) attributable to noncontrolling interests in subsidiaries		373			(23,376	)
Net income attributable to common equity	$	419		$	45,777

Average occupancy rate excludes the Rotunda Property, the Damascus Property and the Westridge Square Property from all periods presented as the properties were sold in the ~~Current Quarter.~~three months ended January 31, 2022. See Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for further details.

NOI is based on operating revenue and expenses directly associated with the operations of the real estate properties, but excludes deferred rents (straight lining), depreciation, financing costs and other items. FREIT ~~Maryland~~ assesses and measures segment operating results based on NOI.

Same Property NOI: FREIT ~~Maryland~~ considers same property net operating income (“Same Property NOI”) to be a useful supplemental non-GAAP measure of its operating performance. FREIT ~~Maryland~~ defines same property within both the commercial and residential segments to be those properties that FREIT ~~Maryland~~ has owned and operated for both the current and prior periods presented, excluding those properties that FREIT ~~Maryland~~ acquired, sold or redeveloped during those periods. Any newly acquired property that has been in operation for less than a year, any property that is undergoing a major redevelopment but may still be in operation at less than full capacity, and/or any property that has been sold is not considered same property.

NOI and Same Property NOI are non-GAAP financial measures and are not measures of operating results or cash flow as measured by GAAP, and are not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity.

~~Index~~

~~Page 26~~

COMMERCIAL SEGMENT

The commercial segment contains five (5) separate properties, excluding the Rotunda Property, the Westridge Square Property and the Damascus Property, which were sold on December 30, 2021, January 7, 2022 and January 10, 2022, respectively. ~~Three~~Four of these properties

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are multi-tenanted retail centers ~~one is a single tenanted retail center located in Glen Rock, New Jersey~~ and one is single tenanted on land located in Rockaway, New Jersey owned by FREIT ~~Maryland~~ from which it receives monthly rental income from a tenant who has built and operates a bank branch on the land. (See Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three properties.~~the Maryland Properties.)

As indicated in the table above under the caption Segment Information, total revenue and NOI from ~~FREIT Maryland’s~~FREIT’s commercial segment for the Current Quarter decreased by ~~32%~~47.8% and ~~56.1%~~38.4%, respectively, as compared to the Prior Year’s Quarter. Average occupancy for all commercial properties, excluding the Maryland Properties sold, for the Current Quarter decreased by ~~1.3%,~~2.5% as compared to the Prior Year’s Quarter.

The decline in revenue for the Current Quarter was primarily attributable to the ~~following: (a) a decrease of approximately $1.9 million (excluding an increase in the straight-line rent receivable of approximately $0.2 million) attributed to the~~ Maryland Properties sold in the ~~Current Quarter; and (b) a decrease of approximately $0.1 million attributed to lease termination fees received in the~~ Prior Year’s ~~Quarter from Pet Valu, Inc., a former pet store tenant at the Preakness Shopping Center.~~Quarter. The decrease in NOI for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately ~~$1.8 million~~$778,000 attributed to the Maryland Properties sold in the ~~Current~~Prior Year’s Quarter; ~~and~~offset by (b) a ~~decrease of approximately $0.2 million attributed to a~~ decline ~~in revenue of approximately $0.1 million as explained above and an increase~~ in snow removal costs of approximately ~~$0.1 million at~~$93,000, excluding the ~~Preakness Shopping Center.~~Maryland Properties sold, due to a milder winter compared to the Prior Year’s Quarter.

Same Property Operating Results: ~~FREIT Maryland’s~~FREIT’s commercial segment currently contains five (5) same properties. (See definition of same property under Segment Information above.) The Rotunda ~~property,~~Property, the Westridge Square Property and the Damascus Property were excluded from same property results for all periods presented because these properties were sold in the ~~Current~~Prior Year’s Quarter. Same property revenue and NOI for the Current Quarter ~~decreased~~increased by ~~6.8%~~2.8% and ~~24%~~16.5%, respectively, as compared to the Prior Year’s Quarter. The changes resulted from the factors discussed in the immediately preceding paragraph.

Leasing: The following ~~tables reflect~~table reflects leasing activity at ~~FREIT Maryland’s~~FREIT’s commercial properties for comparable leases (leases executed for spaces in which there was a tenant at some point during the previous twelve-month period) and non-comparable leases for the Current ~~Quarter (excluding any leases executed for the Rotunda Property, the Westridge Square Property and the Damascus Property which were sold in the Current Quarter):~~Quarter:

RETAIL: Number of
Leases Lease Area
(Sq. Ft.) Weighted
Average Lease
Rate (per Sq.
Ft.) Weighted
Average Prior
Lease Rate (per
Sq. Ft.) % Increase
(Decrease) Tenant
Improvement
Allowance (per
Sq. Ft.) (a) Lease
Commissions
(per Sq. Ft.) (a)

Comparable leases (b) 1 2,750 $ 20.50 $ 60.80 -66.3% $ — $ —

Non-comparable leases 2 4,483 $ 25.15 N/A N/A $ 1.49 $ 1.26

Total leasing activity 3 7,233

RETAIL:	Number of Leases		Lease Area (Sq. Ft.)		Weighted Average Lease Rate (per Sq. Ft.)		Weighted Average Prior Lease Rate (per Sq. Ft.)		% Increase (Decrease)		Tenant Improvement Allowance (per Sq. Ft.) (a)		Lease Commissions (per Sq. Ft.) (a)

Comparable leases (b)		—		—	$	—	$	—		0.0%	$	—	$	—

Non-comparable leases		1		1,384	$	29.14		N/A		N/A	$	—	$	1.17

Total leasing activity		1		1,384

~~(a) These leasing costs are presented as annualized costs per square foot and are allocated uniformly over the initial lease term.~~

~~(b) This includes new tenant leases and/or modifications/extensions/renewals of existing tenant leases.~~

(a)

These leasing costs are presented as annualized costs per square foot and are allocated uniformly over the initial lease term.

(b)

This includes new tenant leases and/or modifications/extensions/renewals of existing tenant leases.

RESIDENTIAL SEGMENT

FREIT ~~Maryland~~ currently operates six (6) multi-family apartment buildings or complexes totaling 792 apartment units, excluding the Icon at the Rotunda Property, which was sold as part of the Maryland Properties on December 30, ~~2021. (See~~2021 (see Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial ~~statements for additional details on~~statements) and the ~~sale of the Rotunda Property.)~~Pierre Towers property, which was converted to a TIC (see Note 5 to FREIT’s condensed consolidated financial statements).

As indicated in the table above under the caption Segment Information, total revenue and NOI from ~~FREIT Maryland’s~~FREIT’s residential segment for the Current Quarter decreased by ~~4.1%~~25% and ~~6.3%~~29.3%, respectively, as compared to the Prior Year’s Quarter. Average occupancy for all residential properties, excluding the Icon at the Rotunda property sold, for the Current Quarter ~~increased~~decreased by ~~1.6%,~~2.1% as compared to the Prior Year’s Quarter.

The decrease in revenue and NOI for the Current Quarter was primarily attributable ~~to the following: (a) a decrease of approximately $0.6 million attributed~~ to the Icon at the Rotunda Property sold in the Current Quarter; offset by (b) an increase of approximately $0.3 million, excluding the Icon at the Rotunda Property, primarily driven by an increase in the average occupancy rate to 98.9% from 97.3% in the Prior Year’s Quarter. The decrease in NOI for the Current Quarter was primarily attributable to the following: (a) a decrease of approximately $0.4 million attributed to the Icon at the Rotunda Property sold in the Current Quarter; offset by (b) an increase of approximately $0.2 million, excluding the Icon at the Rotunda Property, which was primarily driven by an increase in revenue as explained above.

Same Property Operating Results: ~~FREIT Maryland’s~~FREIT’s residential segment currently contains six (6) same properties. (See definition of same property under Segment Information above.) The Icon at the Rotunda ~~property~~Property was excluded from same property results

~~Index~~

~~Page 27~~

for all periods presented because this property was sold in the ~~Current~~Prior Year’s Quarter. Same property revenue and NOI for the Current Quarter increased by ~~7.5%~~0.8% and 7%0.9%, respectively, as compared to the Prior Year’s Quarter. The changes resulted from the factors discussed in the immediately preceding paragraph.

~~FREIT Maryland’s~~FREIT’s residential revenue is principally composed of monthly apartment rental income. Total rental income is a factor of occupancy and monthly apartment rents. Monthly average residential rents ~~(excluding from both periods presented for comparability purposes the Icon at the Rotunda property which was sold in the Current Quarter),~~ at the end of the Current Quarter and the Prior Year’s Quarter were ~~$1,958~~$2,080 and ~~$1,957,~~$1,958, respectively. A 1% decline in annual average occupancy, or a 1% decline in average rents from current levels, results in an annual revenue decline of approximately ~~$186,000~~$198,000 and ~~$184,000,~~$191,000, respectively.

Capital expenditures: ~~Since all of~~ FREIT ~~Maryland’s apartment communities, with the exception of the Boulders, Regency and Station Place properties, were constructed more than 25 years ago, FREIT Maryland~~ tends to spend more in any given year on maintenance and capital improvements at its residential properties which were constructed more than ~~may be spent~~25 years ago (Steuben Arms, Berdan Court and Westwood Hills properties) than on its newer ~~properties. As a result of the COVID-19 global pandemic, only capital improvements deemed essential are being made at this time.~~properties (Boulders, Regency and Station Place properties). Funds for these capital projects are available from cash flow from the property's operations and cash reserves.

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Page 23

FINANCING COSTS

	Three Months Ended January 31,
	2023		2022
	(In Thousands of Dollars)
Fixed rate mortgages (a):
1st Mortgages
Existing	$	1,211	$	1,322
New		—		20
Variable rate mortgages:
1st Mortgages
Existing		518		952
New		—		—
Interest rate swap contracts breakage fee		—		213
Other		26		58
Total financing costs, gross		1,755		2,565
Amortization of mortgage costs		121		363
Total financing costs, net	$	1,876	$	2,928

(a) Includes the effect of interest rate swap contracts which effectively convert the floating interest rate to a fixed interest rate over the term of the loan.

Three Months Ended January 31,
2022 2021
(In Thousands of Dollars)
Fixed rate mortgages (a):
    1st Mortgages
    Existing $ 1,322 $ 1,461
    New 20 —
Variable rate mortgages:
    1st Mortgages
    Existing 952 1,316
    New — —
Interest rate swap contracts breakage fee 213 —
Other 58 61
Total financing costs, gross 2,565 2,838
     Amortization of mortgage costs 363 294
Total financing costs, net $ 2,928 $ 3,132

(a) Includes the effect of interest rate swap contracts which effectively convert the floating interest rate to a fixed interest rate over the term of the loan.

Total financing costs for the Current Quarter decreased by approximately ~~$204,000,~~$1,052,000, or ~~6.5%~~35.9%, compared to the Prior Year’s Quarter which iswas primarily attributable to the following: (a) a decline of approximately ~~$364,000 in interest on variable rate mortgages primarily~~$1,304,000 attributed to the pay-down ~~in the Current Quarter~~ of the loans outstanding on the ~~Rotunda Property and~~Maryland Properties sold in the ~~Westridge Square Property from the net proceeds of the sale;~~Prior Year’s Quarter; offset by (b) an increase of approximately ~~$69,000~~$193,000 primarily attributed to the ~~write-off of~~increase in the ~~deferred mortgage costs~~variable interest rate on the loans associated with the sale of the Maryland Properties; offset by (c) an increase of approximately $213,000 attributed to a breakage fee on the early termination of the interest rate swap contracts relatingWestwood Hills loan as compared to the ~~loan outstanding on the Damascus property, which was repaid from the net proceeds of the sale of the Damascus property in the Current~~Prior Year’s Quarter. (See Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

GENERAL AND ADMINISTRATIVE EXPENSES

G&A ~~expense~~ for the Current Quarter was approximately ~~$1,327,000~~$827,000 compared to ~~$1,260,000~~$1,327,000 for the Prior Year’s Quarter. The primary components of G&A are legal and professional fees, directors’ fees, corporate expenses and accounting/auditing fees. The ~~increase~~decrease in G&A ~~costs~~ for the Current Quarter was primarily driven by ~~an increase~~a decline in legal costs attributed to the legal proceeding between FREIT ~~Maryland~~ and certain of its affiliates and Sinatra Properties, LLC.

DEPRECIATION

Depreciation expense for the Current Quarter was approximately ~~$1,820,000~~$722,000 compared to ~~$2,295,000~~$1,820,000 for the Prior Year’s Quarter. The decline in depreciation expense for the Current Quarter was primarily attributable to the following: (a) a decline of approximately $1,026,000 attributed to the Maryland Properties sold in the Prior Year’s Quarter; and (b) a decrease of approximately ~~$0.5 million~~$72,000, excluding the Maryland Properties sold in the Prior Year’s Quarter, primarily attributed to the write-off of a tenant improvement at the Wayne Preakness Shopping Center in the Prior Year’s Quarter. (See Note 7 to FREIT’s condensed consolidated financial statements for additional details on the sale of the Maryland ~~Properties in the Current Quarter; offset by (b) an increase of approximately $0.1 million attributed to tenant improvements written off at the Preakness Shopping Center in the Current Quarter.~~Properties.)

~~Index~~

~~Page 28~~

LIQUIDITY AND CAPITAL RESOURCES

Net cash ~~provided by~~used in operating activities was approximately ~~$2.9~~$0.9 million for the Current Quarter compared to net cash provided by operating activities of approximately ~~$5.2~~$2.9 million for the Prior Year’s Quarter. FREIT ~~Maryland~~ expects that cash provided by operating activities and cash reserves will be adequate to cover mandatory debt service payments (including payments of interest, but excluding balloon payments, which are expected to be refinanced and/or extended), real estate taxes, dividends, recurring capital improvements at its properties and other needs to maintain its status as a REIT for at least a period of one year from the date of filing of this quarterly report on Form 10-Q.

As of January 31, ~~2022,~~2023, FREIT ~~Maryland~~ had cash, cash equivalents and restricted cash totaling ~~$106.9~~$45.6 million, compared to ~~$39~~$58.5 million at October 31, ~~2021.~~2022. The ~~increase~~decrease in cash in the Current Quarter iswas primarily attributable to ~~approximately $252.3 million in net cash provided by investing activities including capital expenditures and $2.9 million in net cash provided by operating activities offset by approximately $187.3~~$11.8 million in net cash used in financing ~~activities.~~activities, $0.9 million in net cash used in operating activities and $0.4 million in net cash used in investing activities including capital expenditures. The ~~increase~~decrease in cash of approximately ~~$67.9~~$13 million in the Current Quarter was primarily attributed to the following: (a) dividends paid of approximately $10.7 million; (b) deferred compensation paid to respective directors of approximately $2.3 million; (c) a distribution of additional net proceeds received from the sale of the Rotunda Property to the minority interest of approximately ~~$54.2 million (inclusive of a loan repayment from Grande Rotunda of approximately $27.7 million~~$1.6 million; and ~~repayment of secured loans receivable including accrued interest held by certain members in Rotunda 100 of approximately $5.1 million); (b)~~(d) a distribution of additional net proceeds received from the sale of the Damascus Property to the minority interest of approximately ~~$11.8~~$0.3 million; ~~(c) anticipated funds~~offset by (e) proceeds received from the exercise of stock

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Page 24

options in November 2022 of approximately $9.3 million to be released from funds held in post-closing escrow related to the sale of the Maryland Properties; offset by (d) a loan pay-down including closing costs of approximately $7.6 million attributed to the refinancing of the loan on the Boulders property; and (e) a net cash outlay from the sale of the Westridge Square Property of approximately $0.7$1.2 million. (See Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for additional details on the sale of ~~these three~~the Maryland properties.)

Credit Line: ~~FREIT Maryland’s~~FREIT’s revolving line of credit provided by Provident Bank was renewed for a three-year term ending on October 31, 2023. Draws against the credit line can be used for working capital needs and standby letters of credit. Draws against the credit line are secured by mortgages on ~~FREIT Maryland’s~~FREIT’s Franklin Crossing Shopping Center in Franklin Lakes, New Jersey and retail space in Glen Rock, New Jersey. The total line of credit is $13 million and the interest rate on the amount outstanding is based on a floating interest rate of prime minus 25 basis points with a floor of 3.75%. As of January 31, ~~2022~~2023 and October 31, ~~2021,~~2022, there was no amount outstanding and $13 million was available under the line of credit.

Dividend: After careful consideration of ~~FREIT Maryland’s~~FREIT’s projected operating results and cash needs, the FREIT Board of Directors (“Board”) declared a dividend of ~~$0.10~~approximately $372,000 ($0.05 per ~~share~~share) in the first quarter of Fiscal 2023 which was paid on March 15, ~~2022~~2023 to stockholders of record on March 1, ~~2022.~~2023. The Board will continue to evaluate the dividend on a quarterly basis.

As of January 31, ~~2022, FREIT Maryland’s~~2023, FREIT’s aggregate outstanding mortgage debt was ~~$137.8~~$138.9 million, which bears a weighted average interest rate of ~~3.94%~~5.22% and an average life of approximately ~~2.03~~2.4 years. ~~FREIT Maryland’s~~FREIT’s mortgages are subject to amortization schedules that are longer than the terms of the mortgages. As such, balloon payments (unpaid principal amounts at the mortgage due date) for all mortgage debt will be required as follows:

Fiscal Year 2022 2023 2024 2025 2026 2027 2028 2029
($ in millions)
Mortgage "Balloon" Payments $47.4 (A) $17.1 $16.5 $13.9 $0.0 $0.0 $10.5 $26.0

(A) Includes the following:
(1) A loan on the Preakness Shopping Center located in Wayne, New Jersey in the amount of approximately $22.4 million. Although the Company continues to make its required debt service payments in accordance with the loan agreement, it is unable to comply with a look back debt service coverage ratio loan covenant contained in the mortgage loan agreement held by People’s United Bank. As such, the bank could exercise its remedies under the loan agreement including, among other things, requiring a partial or full repayment of the loan. (See Note 9 to FREIT Maryland's condensed consolidated financial statements for additional details.)

(2) A loan on the Westwood Hills property located in Westwood, New Jersey in the amount of $25 million which matures on October 1, 2022 and has an option to extend for two (2) additional six (6)-month periods from the maturity date, subject to provisions of the loan agreement.


Fiscal Year		2023	2024	2025	2026	2027	2028	2029
($ in millions)
Mortgage "Balloon" Payments		$25.0 (A)	$33.0 (B)	$38.9	$0.0	$0.0	$10.5	$26.0

	Includes the following:

	(A)	A loan on the Westwood Hills property, which is a residential property located in Westwood, New Jersey, in the amount of approximately $25 million. Pursuant to the loan agreement, this loan was extended for an additional six (6) months from an initial maturity date of October 1, 2022 to a new maturity date of April 1, 2023. On March 1, 2023, Westwood Hills, LLC exercised its right, pursuant to the loan agreement, to extend the term of its loan, for an additional six (6) months to a new maturity date of October 1, 2023 on the same terms and conditions as stated in the loan agreement. (See Note 9 to FREIT's condensed consolidated financial statements for additional details.)

	(B)	Effective February 1, 2023, FREIT entered into a loan extension and modification agreement with Valley National Bank on its loan secured by the Westwood Plaza shopping center in Westwood, New Jersey with a then outstanding balance of approximately $16,864,361. Under the terms and conditions of this loan extension and modification, the loan will be extended for a term of one (1) year from February 1, 2023 to February 1, 2024 with the option of FREIT to extend for one year from the maturity date, subject to certain provisions of the loan agreement. (See Note 16 to FREIT's condensed consolidated financial statements for additional details.)

~~Index~~

~~Page 29~~

The following table shows the estimated fair value and net carrying value of ~~FREIT Maryland’s~~FREIT’s long-term debt at January 31, ~~2022~~2023 and October 31, ~~2021:~~2022:

($ in Millions) January 31, 2022 October 31, 2021

Fair Value $136.5 $301.6

Carrying Value, Net $136.5 $299.9

($ in Millions)	January 31, 2023	October 31, 2022

Fair Value	$133.8	$132.2

Carrying Value, Net	$137.8	$138.1

FREIT ~~Maryland~~ expects to refinance the individual mortgages with new mortgages or exercise extension options when their terms expire. To this extent, FREIT ~~Maryland~~ has exposure to interest rate risk. If interest rates, at the time any individual mortgage note is due, are higher than the current fixed interest rate, higher debt service may be required, and/or refinancing proceeds may be less than the amount of

Index

Page 25

mortgage debt being retired. For example, at January 31, ~~2022,~~2023, a 1% interest rate increase would reduce the fair value of ~~FREIT Maryland’s~~FREIT’s debt by $4$2.8 million, and a 1% decrease would increase the fair value by ~~$4.3~~$3 million.

FREIT ~~Maryland~~ continually reviews its debt levels to determine if additional debt can prudently be utilized for property acquisitions for its real estate portfolio that will increase income and cash flow to stockholders.

~~On December 30, 2021, FREIT Maryland refinanced its $14.4 million loan (which would have matured on~~Effective February 1, ~~2022)~~2023, FREIT entered into a loan extension and modification agreement with Valley National Bank on its ~~Boulders property located~~loan secured by the Westwood Plaza shopping center in ~~Rockaway,~~Westwood, New Jersey with a ~~new~~then outstanding balance of approximately $16,864,361. Under the terms and conditions of this loan ~~held by ConnectOne Bank in~~extension and modification, the amount of $7,500,000, with additional funding available to be drawn upon in the amount of $7,500,000 for corporate needs inclusive of $250,000 for legal fees potentially incurred by the lender related to the lis pendens on this property resulting from the legal proceeding between FREIT Maryland and certain of its affiliates and Sinatra Properties, LLC (See Note 6 to FREIT Maryland’s condensed consolidated financial statements). This loan is interest-only and has a maturity date of ~~January~~the loan will be extended for a term of one (1) year from February 1, 2023 to February 1, 2024 with the option of FREIT ~~Maryland~~ to extend for one additional year from the maturity date, subject to certain provisions of the loan agreement. ~~This refinancing~~The loan will ~~provide annual debt service savings~~be payable based on monthly installments of approximately ~~$1,173,000 as a result of the reduction in the principal amount, a reduction in the annual interest rate from~~$157,347 based on a fixed rate of ~~5.37%~~interest of 7.5%. Additionally, FREIT funded an interest reserve escrow account (“Escrow”) at closing representing the annualized principal and interest payments for one (1) year, amounting to approximately $1,888,166. This Escrow is held at Valley National Bank and in the event of a default on this loan, the bank shall be permitted to use the proceeds from the escrow account to make monthly debt service payments on the loan.

On August 19, 2022, Westwood Hills, LLC exercised its right, pursuant to the loan agreement, to extend the term of its $25 million loan on its property located in Westwood, New Jersey, for an additional six (6) months from an initial maturity date of October 1, 2022 to a ~~fixed~~new maturity date of April 1, 2023. On March 1, 2023, Westwood Hills, LLC exercised its right, pursuant to the loan agreement, to extend the term of its loan, for an additional six (6) months to a new maturity date of October 1, 2023 on the same terms and conditions as stated in the loan agreement. As of January 31, 2023, $25,000,000 of this loan was drawn and outstanding and the interest rate ~~of 2.85% and interest-only payments being required under this new loan.~~was 8.37%.

Interest rate swap contracts: To reduce interest rate volatility, FREIT ~~Maryland~~ uses a “pay fixed, receive floating” interest rate swap to convert floating interest rates to fixed interest rates over the term of a certain loan. FREIT ~~Maryland~~ enters into these swap contracts with a counterparty that is usually a high-quality commercial bank. In essence, FREIT ~~Maryland~~ agrees to pay its counterparties a fixed rate of interest on a dollar amount of notional principal (which generally corresponds to ~~FREIT Maryland’s~~FREIT’s mortgage debt) over a term equal to the term of the mortgage notes. ~~FREIT Maryland’s~~FREIT’s counterparties, in return, agree to pay FREIT ~~Maryland~~ a short-term rate of interest - generally LIBOR - on that same notional amount over the same term as the mortgage notes.

FREIT ~~Maryland has~~had variable interest rate loans secured by its Damascus Centre ~~Regency,~~and Wayne PSC properties and currently has a variable interest rate loan secured by its Regency and Station Place properties. To reduce interest rate fluctuations, FREIT ~~Maryland~~ entered into interest rate swap contracts for each of these loans. These interest rate swap contracts effectively converted variable interest rate payments to fixed interest rate payments. The contracts were based on a notional amount of approximately $16,200,000 ($~~14,838,000~~14,504,000 at January 31, ~~2022)~~2023) for the Regency ~~swap, a notional amount of approximately $25,800,000 ($22,144,000 at January 31, 2022) for the Wayne PSC~~ swap and a notional amount of approximately $12,350,000 ($~~11,917,000~~11,695,000 at January 31, ~~2022)~~2023) for the Station Place swap. On January 10, 2022, the property owned by Damascus Centre was sold and a portion of the proceeds from the sale was used to pay off the $18.2 million then outstanding balance of ~~this~~the underlying loan and the corresponding swap breakage fees of approximately $213,000 related to the early termination of the interest rate swap contracts on this loan which was included as interest expense on the accompanying condensed consolidated statement of income for the three months ended January 31, 2022. (See Note 7 to ~~FREIT Maryland’s~~FREIT’s condensed consolidated financial statements for further details on the sale of this property.) On June 17, 2022, Wayne PSC terminated its interest rate swap contract on its underlying loan held with People’s United Bank, which had a maturity date of October 2026, for a settlement amount of approximately $1.4 million. People’s United Bank held the proceeds from this settlement in escrow until the underlying loan was paid off in July 2022. (See Note 9 to FREIT’s condensed consolidated financial statements for further details.)

Interest rate cap contract: To limit exposure on interest rate volatility, FREIT ~~Maryland uses~~may use an interest rate cap contract to cap a floating interest rate at a set pre-determined rate. FREIT ~~Maryland~~ enters into cap contracts with a counterparty that is usually a high-quality commercial bank. In essence, so long as the floating interest rate is below the cap rate, FREIT ~~Maryland~~ agrees to pay its counterparties a variable rate of interest on a dollar amount of notional principal (which generally corresponds to ~~FREIT Maryland’s~~FREIT’s mortgage debt). Once the floating interest rate rises above the cap rate, ~~FREIT Maryland’s~~FREIT’s counterparties, in return, agree to pay FREIT ~~Maryland~~ a short-term rate of interest above the cap on that same notional amount.

FREIT Maryland had a variable interest rate loan secured by its Rotunda Property. As part of the refinancing of Grande Rotunda’s construction loan with a new loan from Aareal Capital Corporation, Grande Rotunda had purchased an interest rate cap contract on LIBOR for the full amount that could have been drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for the first two years of this loan which matured on March 5, 2020. On February 28, 2020, Grande Rotunda had purchased an interest rate cap on LIBOR, with an effective date of March 5, 2020, for the full amount that could have been drawn on this loan of $121.9 million, capping the one-month LIBOR rate at 3% for one year, maturing on March 5, 2021. Effective February 6, 2021, Grande Rotunda exercised the first extension option on this loan with a balance in the amount of approximately $118.5 million, extending

~~Index~~

~~Page 30~~

the loan one year with a new maturity date of February 6, 2022. Additionally, Grande Rotunda purchased an interest rate cap contract on LIBOR, with an effective date of March 5, 2021, for the loan amount of approximately $118.5 million, capping the one-month LIBOR rate at 3% for one year expiring on February 6, 2022. On December 30, 2021, the Rotunda Property owned by Grande Rotunda was sold, a portion of the proceeds from the sale was used to pay off the $116.5 million then outstanding balance of this loan and the corresponding interest rate cap on this loan matured with no settlement due at maturity. (See Note 7 to FREIT Maryland’s condensed consolidated financial statements for further details.)

In accordance with ASU 2017-12, “Targeted Improvements to Accounting for Hedging Activities to Accounting Standards Codification Topic 815, Derivatives and Hedging ("ASC 815")”, FREIT ~~Maryland~~ marks-to-market its interest rate swap and cap contracts. As the floating interest rate varies from time-to-time over the term of the contract, the value of the contract will change upward or downward. If the floating rate is higher than the fixed rate, the value of the contract goes up and there is a gain and an asset. If the floating rate is less than the fixed rate, there is a loss and a liability. The interest rate swaps and cap are accounted for as cash flow hedges with the corresponding gains or losses on these contracts not affecting ~~FREIT Maryland’s~~FREIT’s condensed consolidated statement of income; changes in the fair value of these cash flow hedges will be reported in other comprehensive income and appear in the equity section of the condensed consolidated balance sheet. This gain or loss represents the economic consequence of liquidating fixed rate swaps or the cap contract and replacing them with like-duration funding at current market rates, something we would likely never do. Periodic cash settlements of these contracts will be accounted for as an adjustment to interest expense.

FREIT ~~Maryland~~ has the following derivative-related risks with its interest rate swap ~~and cap~~ contracts (“contract”): 1) early termination risk, and 2) counterparty credit risk.

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Page 26

Early Termination ~~Risk:~~Risk: If FREIT ~~Maryland~~ wants to terminate its contract before maturity, it would be bought out or terminated at market value; i.e., the difference in the present value of the anticipated net cash flows from each of the contract’s parties. If current variable interest rates are significantly below ~~FREIT Maryland’s~~FREIT’s fixed interest rate payments, this could be costly. Conversely, if interest rates rise above ~~FREIT Maryland’s~~FREIT’s fixed interest payments and FREIT ~~Maryland~~ elected early termination, FREIT ~~Maryland~~ would realize a gain on termination. At January 31, ~~2022,~~2023, the contracts for Regency and Station Place were in ~~the counterparties’ favor and the contract for Wayne PSC was in FREIT Maryland’s~~FREIT’s favor. If FREIT ~~Maryland~~ had terminated these contracts at that date, it would have realized ~~losses~~a gain of approximately ~~$475,000~~$482,000 for the Regency swap and ~~$642,000~~$477,000 for the Station Place swap all of which have been included ~~as a liability~~ in ~~FREIT Maryland’s~~FREIT’s condensed consolidated balance sheet as at January 31, ~~2022 and a gain of approximately $71,000 for the Wayne PSC swap which has been included as an asset in FREIT Maryland’s condensed consolidated balance sheet as of January 31, 2022.~~2023. The change in the fair value for the contract (gain or loss) during such period has been included in comprehensive (loss) income ~~(loss)~~ and for the three months ended January 31, 2023 and 2022, ~~and 2021,~~ FREIT ~~Maryland~~ recorded an unrealized loss of approximately $450,000 and unrealized gain of ~~approximately~~ $1,262,000, ~~and $498,000,~~ respectively, in the condensed consolidated statements of comprehensive (loss) income.

Counterparty Credit ~~Risk:~~Risk: Each party to a contract bears the risk that its counterparty will default on its obligation to make a periodic payment. FREIT ~~Maryland~~ reduces this risk by entering into a contract only with major financial institutions that are experienced market makers in the derivatives market.

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Page 3127

ADJUSTED FUNDS FROM OPERATIONS

Funds From Operations (“FFO”) is a non-GAAP measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”). FREIT ~~Maryland~~ does not include distributions from equity/debt/capital gain sources in its computation of FFO. Although many consider FFO as the standard measurement of a REIT’s performance, FREIT ~~Maryland~~ modified the NAREIT computation of FFO to include other adjustments to GAAP net income that are not considered by management to be the primary drivers of its decision making process. These adjustments to GAAP net income are straight-line rents and recurring capital improvements on ~~FREIT Maryland’s~~FREIT’s residential apartments. The modified FFO computation is referred to as Adjusted Funds From Operations (“AFFO”). FREIT ~~Maryland~~ believes that AFFO is a superior measure of its operating performance. FREIT ~~Maryland~~ computes FFO and AFFO as follows:

For the Three Months Ended January 31,
2022 2021
(In Thousands, Except Per Share)
Funds From Operations ("FFO") (a)
Net income $ 69,153 $ 779
Depreciation of consolidated properties 1,820 2,295
Amortization of deferred leasing costs 71 110
Distributions to non-controlling interests (345 ) —
Net gain on sale of Maryland properties (70,003 ) —
Adjustment to loss in investment in tenancy-in-common for depreciation 353 351
FFO $ 1,049 $ 3,535

Per Share - Basic and Diluted $ 0.15 $ 0.50

(a) As prescribed by NAREIT.

Adjusted Funds From Operations ("AFFO")
FFO $ 1,049 $ 3,535
Deferred rents (Straight lining) 10 206
Capital Improvements - Apartments (48 ) (82 )
AFFO $ 1,011 $ 3,659

Per Share - Basic and Diluted $ 0.14 $ 0.52

Weighted Average Shares Outstanding:
Basic 7,036 7,009
Diluted 7,099 7,009

	For the Three Months Ended January 31,
	2023			2022
	(In Thousands, Except Per Share Amounts)
Funds From Operations ("FFO") (a)
Net income	$	46		$	69,153
Depreciation of consolidated properties		722			1,820
Amortization of deferred leasing costs		19			71
Distributions to non-controlling interests		—	(b)		(345	)(c)
Net loss (gain) on sale of Maryland properties		243			(70,003	)
Adjustment to loss on investment in tenancy-in-common for depreciation		358			353
FFO	$	1,388		$	1,049

Per Share - Basic and Diluted	$	0.19		$	0.15

(a) As prescribed by NAREIT.
(b) FFO excludes the additional distribution of proceeds to non-controlling interests in the amount of approximately $1.9 million related to the sale of the Damascus and Rotunda properties. See Note 7 to FREIT's condensed consolidated financial statements for further details.
(c) FFO excludes the distribution of proceeds to non-controlling interests in the amount of approximately $19.4 million related to the sale of the Damascus and Rotunda properties. See Note 7 to FREIT's condensed consolidated financial statements for further details.


Adjusted Funds From Operations ("AFFO")
FFO	$	1,388		$	1,049
Deferred rents (Straight lining)		28			10
Capital Improvements - Apartments		(145	)		(48	)
AFFO	$	1,271		$	1,011

Per Share - Basic and Diluted	$	0.17		$	0.14

Weighted Average Shares Outstanding:
Basic		7,424			7,036
Diluted		7,433			7,099

FFO and AFFO do not represent cash generated from operating activities in accordance with GAAP, and therefore should not be considered a substitute for net income as a measure of results of operations or for cash flow from operations as a measure of liquidity. Additionally, the application and calculation of FFO and AFFO by certain other REITs may vary materially from that of FREIT, ~~Maryland,~~ and therefore ~~FREIT Maryland’s~~FREIT’s FFO and AFFO may not be directly comparable to those of other REITs.

INFLATION

Inflation can impact the financial performance of FREIT ~~Maryland~~ in various ways. ~~FREIT Maryland’s~~FREIT’s commercial tenant leases normally provide that the tenants bear all or a portion of most operating expenses, which can reduce the impact of inflationary increases on ~~FREIT Maryland.~~FREIT. Apartment leases are normally for a one-year term, which may allow FREIT ~~Maryland~~ to seek increased rents as leases renew or when new tenants are obtained, subject to prevailing market conditions.

Index

Page 3228

Item 3: Quantitative and Qualitative Disclosures About Market Risk

See “Commercial Segment”, “Residential Segment” and “Liquidity and Capital Resources” under Item 2 above for a detailed discussion of ~~FREIT Maryland’s~~FREIT’s quantitative and qualitative market risk disclosures.

Item 4: Controls and Procedures

At the end of the period covered by this report, we carried out an evaluation of the effectiveness of the design and operation of ~~FREIT Maryland’s~~FREIT’s disclosure controls and procedures. This evaluation was carried out under the supervision and with participation of ~~FREIT Maryland’s~~FREIT’s management, including ~~FREIT Maryland’s~~FREIT’s Chief Executive Officer and Chief Financial Officer, who concluded that ~~FREIT Maryland’s~~FREIT’s disclosure controls and procedures are effective as of January 31, ~~2022.~~2023. There has been no change in ~~FREIT Maryland’s~~FREIT’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, ~~FREIT Maryland’s~~FREIT’s internal control over financial reporting.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in ~~FREIT Maryland’s~~FREIT’s reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in ~~FREIT Maryland’s~~FREIT’s reports filed under the Exchange Act is accumulated and communicated to management, including ~~FREIT Maryland’s~~FREIT’s Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Index

Page 3329

Part II: Other Information

Item 1: Legal Proceedings

Upon the execution of the Purchase and Sale Agreement, the Purchaser delivered into escrow a deposit in the amount of $15 million (the “Deposit”), in the form of an unconditional, irrevocable letter of credit in such amount (the “Letter of Credit”). The Purchase and Sale Agreement provided that the Sellers’ exclusive remedy, in the event of a “Purchaser Default” and the termination of the Purchase and Sale Agreement, is the forfeiture of the Deposit to the Sellers as liquidated damages. Accordingly, contemporaneously with the Sellers’ delivery of the termination notice to the Purchaser, the Sellers delivered written notice to the escrow agent requesting that the escrow agent release the Letter of Credit from escrow and deliver same to the Sellers.

~~On May 6, 2020, the Purchaser filed a complaint (the “Complaint”) against the Sellers in~~February 4, 2022, the Superior Court of New Jersey, ~~in which, among other things,~~Monmouth County (“Court”) entered an Order with respect to summary judgment motions filed by the ~~Purchaser alleged breach of contract and breach of the covenant of good faith and fair dealing against the Sellers~~parties in connection with ~~the Sellers’ termination~~litigation between certain affiliates of ~~the Purchase~~FREIT (the “Sellers” or “Defendant”) and ~~Sale Agreement.~~Sinatra Properties, LLC (“Sinatra” or “Plaintiff”). The ~~Purchaser sought (a)~~litigation relates to a ~~judgment of specific performance compelling the Sellers to convey the properties under the~~ Purchase and Sale Agreement to the Purchaser; (b) declaratory judgment from the court that (i) the Purchase and Sale Agreement was not terminated, (ii) the Purchaser was not in default under the Purchase and Sale Agreement, and (iii)entered into on January 14, 2020 (“PSA”) between the Sellers ~~were in default under~~and Sinatra involving the ~~Purchase and Sale Agreement, subject to a right to cure; (c) an order for injunctive relief compelling~~sale by the Sellers ~~to perform the Purchase and Sale Agreement; (d)~~of 100% of their ownership interests in the event that the court did not order specific performance, a judgment directing that the Purchaser’s $15 million deposit under the Purchase and Sale Agreement be returned to the Purchaser, and compensatory, consequential and incidental damages in an amount to be determined at trial; and (e) attorneys’ fees and costs.

~~The Purchaser filed lis pendens with respect to each of the~~ six (6) real properties ~~that were subject to the Purchase and Sale Agreement, providing notice to the public of the Complaint. The lis pendens have been dismissed~~held by the Sellers.

The Court ~~pursuant to the~~ Order entered on February 4, 2022 ~~discussed below. Accordingly, subject to the Purchaser’s possible challenge of the Court’s Order, the future sale or financing of these properties is not affected by the lis pendens.~~

~~Index~~

~~Page 34~~

~~confidential information and materials from third parties to whom the Purchaser and/or its affiliates provided such materials; and (g) such other relief as the Court deemed just and equitable.~~

~~On February~~“February 4 ~~2022, the Court entered an Order (the “Order”~~Order”) with respect to the Summary Judgment Motions ~~which~~ provides as follows:

~~(1) The Court finds that the Plaintiff’s have breached the subject contract and the Court dismisses all claims for relief filed by the Plaintiff~~

(1)

The Court finds that the Plaintiff’s have breached the subject contract and the Court dismisses all claims for relief filed by the Plaintiffs in this suit. The Court dismissed the Complaint and dismisses the Lis Pendens.

(2)

The Court finds that the liquidated damage provision of the contract is not enforceable and the Court Orders that the $15 million held in escrow be returned to the Plaintiff.

(3)

The Court dismisses the Counterclaims and Third Party Complaint. All pleadings are dismissed.

~~(2) The~~ Court ~~finds~~denied Sinatra’s Motion for Reconsideration.

~~(3) The Court dismisses the Counterclaims and Third Party Complaint. All pleadings are dismissed.~~

Index

Page 3530

Item 1A: Risk Factors

There were no material changes in any risk factors previously disclosed in FREIT’s Annual Report on Form 10-K for the year ended October 31, ~~2021,~~2022, that was filed with the Securities and Exchange Commission on January ~~28, 2022.~~27, 2023.

Item 6: Exhibits

Exhibit Index

Exhibit 31.1 - Section 302 Certification of Chief Executive Officer

Exhibit 31.2 - Section 302 Certification of Chief Financial Officer

Exhibit 32.1 - Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350

Exhibit 32.2 - Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350

Exhibit 10.1 - Exhibit 10.1 – Second Amendment to Management Agreement made as of March 9, 2023 by and between First Real Estate Investment Trust of New Jersey, Inc. and Hekemian & Co., Inc.

Exhibit 101 - The following materials from ~~FREIT Maryland’s~~FREIT’s quarterly report on Form 10-Q for the period ended January 31, ~~2022,~~2023, are formatted in Inline Extensible Business Reporting Language (“iXBRL”): (i) condensed consolidated balance sheets; (ii) condensed consolidated statements of income; (iii) condensed consolidated statements of comprehensive (loss) income; (iv) condensed consolidated statements of equity; (v) condensed consolidated statements of cash flows; and (vi) notes to condensed consolidated financial statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST REAL ESTATE INVESTMENT
	TRUST OF NEW JERSEY, INC.
	(Registrant)

Date: March ~~17, 2022~~16, 2023
	/s/ Robert S. Hekemian, Jr.
	(Signature)
	Robert S. Hekemian, Jr.
	President and Chief Executive Officer
	(Principal Executive Officer)


	/s/ Allan Tubin
	(Signature)
	Allan Tubin
	Chief Financial Officer and Treasurer
	(Principal Financial/Accounting Officer)

~~For the Quarterly Period Ended~~ ~~January 31, 2022~~
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Maryland		22-1697095
~~Maryland~~	~~22-1697095~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

505 Main Street, Hackensack, New Jersey		07601
(Address of principal executive offices)		(Zip Code)
~~201-488-6400~~
~~(Registrant's telephone number, including area code)~~

~~(Former name, former address and former fiscal year, if changed since last report)~~

	Title of each class	Trading Symbol(s)	~~Trading Symbol(s)~~		Name of each exchange on which registered
	Common stock, par value $0.01 per share	FREVS	~~FREVS~~		OTC Pink Market

Large Accelerated Filer ☐	Accelerated Filer ☐	Non-Accelerated Filer ☒	Smaller Reporting Company ☒
Emerging growth company ☐



Part I:Financial Information			~~Page~~
			Page

Item 1:Unaudited Condensed Consolidated Financial Statements

	a.)	Condensed Consolidated Balance Sheets as of January 31, ~~2022~~2023 and October 31, ~~2021;~~2022;	3

	b.)	Condensed Consolidated Statements of Income for the Three Months Ended January 31, ~~2022~~ 2023 and ~~2021;~~2022;	4

	c.)	Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended January 31, ~~2022~~2023 and ~~2021;~~2022;	5

	d.)	Condensed Consolidated Statements of Equity for the Three Months Ended January 31, ~~2022~~ 2023 and ~~2021;~~2022;	6-7

	e.)	Condensed Consolidated Statements of Cash Flows for the Three Months Ended January 31, ~~2022~~2023 and ~~2021;~~2022;	8

	f.)	Notes to Condensed Consolidated Financial Statements.	9

	~~For the transition period from __________________ to ____________________~~
	~~Commission File No.~~ ~~000-25043~~

FIRST REAL ESTATE INVESTMENT TRUST OF NEW JERSEY, INC.
(Exact name of registrant as specified in its charter)


Item 2:Management’s Discussion and Analysis of Financial Condition and Results of Operations			2018

Item 3:Quantitative and Qualitative Disclosures About Market Risk			3228

Item 4:Controls and Procedures			3228


Part II: Other Information

Item 1: Legal Proceedings			3329

Item 1A:Risk Factors			3530

Item 6:Exhibits			3531

Signatures			3531

	January 31, 2022			October 31, 2021
	(In Thousands, Except Share and Per Share Amounts)
ASSETS
Real estate, at cost, net of accumulated depreciation	$	96,999		$	270,634
Construction in progress		668			665
Cash and cash equivalents		95,438			35,891
Investment in tenancy-in-common		18,902			19,383
Tenants' security accounts		1,062			1,340
Receivables arising from straight-lining of rents		762			3,747
Accounts receivable, net of allowance for doubtful accounts of $1,327 and $966 as of January 31, 2022 and October 31, 2021, respectively		754			1,622
Secured loans receivable (related party)		221			5,292
Funds held in post-closing escrow		9,337			0-
Prepaid expenses and other assets		3,059			5,493
Deferred charges, net		193			2,038
Interest rate swap contract		71			0-
Total Assets	$	227,466		$	346,105


LIABILITIES AND EQUITY

Liabilities:
Mortgages payable, including deferred interest of $358 as of January 31, 2022 and October 31, 2021	$	137,774		$	301,276
Less unamortized debt issuance costs		1,283			1,400
Mortgages payable, net		136,491			299,876

Due to affiliate		0-			3,252
Deferred director compensation payable		2,475			2,475
Accounts payable and accrued expenses		2,804			2,375
Dividends payable		686			686
Tenants' security deposits		1,305			2,039
Deferred revenue		559			1,143
Interest rate cap and swap contracts		1,117			2,308
Total Liabilities		145,437			314,154

Commitments and contingencies


Common Equity:
Preferred stock with par value of $0.01 per share:
5,000,000 and 0 shares authorized and issued, respectively, at January 31, 2022 and October 31, 2021		0-			0-
Common stock with par value of $0.01 per share:
20,000,000 shares authorized at January 31, 2022 and October 31, 2021; 6,860,048 shares issued plus 178,419 and 175,923 vested share units granted to Directors at January 31, 2022 and October 31, 2021, respectively		71			71
Additional paid-in-capital		25,622			25,556
Retained earnings		58,037			12,963
Accumulated other comprehensive loss		(1,089	)		(2,017	)
Total Common Equity		82,641			36,573
Noncontrolling interests in subsidiaries		(612	)		(4,622	)
Total Equity		82,029			31,951
Total Liabilities and Equity	$	227,466		$	346,105


	Three Months Ended January 31,
	2022			2021
	(In Thousands Except Per Share Amounts)
Revenue:
Rental income	$	9,763		$	10,850
Reimbursements		757			1,544
Sundry income		129			360
Total revenue		10,649			12,754

Expenses:
Operating expenses		4,293			4,108
Management fees		497			526
Real estate taxes		1,863			1,917
Depreciation		1,820			2,295
Total expenses		8,473			8,846

Operating income		2,176			3,908

Investment income		26			30
Loss on investment in tenancy-in-common		(124	)		(27	)
Net gain on sale of Maryland properties		70,003			0-
Interest expense including amortization of deferred financing costs		(2,928	)		(3,132	)
Net income		69,153			779

Net income attributable to noncontrolling interests in subsidiaries		(23,376	)		(221	)
Net income attributable to common equity	$	45,777		$	558

Earnings per share:
Basic	$	6.51		$	0.08
Diluted	$	6.45		$	0.08

Weighted average shares outstanding:
Basic		7,036			7,009
Diluted		7,099			7,009

	Common Equity
	Common Stock				Additional Paid-In-		Retained			Accumulated Other Comprehensive			Total Common			Noncontrolling Interests in			Total
	Shares		Amount		Capital		Earnings			(Loss) Income			Equity			Subsidiaries			Equity
	(In Thousands of Dollars, Except Per Share Amounts))

Balance at October 31, 2021		7,036	$	71	$	25,556	$	12,963		$	(2,017	)	$	36,573		$	(4,622	)	$	31,951

Stock based compensation expense						5								5						5

Vested share units granted to Directors, including $17 in dividends declared payable in share units ($0.10 per share)		2				61								61						61

Distributions to noncontrolling interests in subsidiaries														-			(19,700	)		(19,700	)

Net income								45,777						45,777			23,376			69,153

Dividends declared, including $17 payable in share units ($0.10 per share)								(703	)					(703	)					(703	)

Net unrealized gain on interest rate swap contracts											928			928			334			1,262

Balance at January 31, 2022		7,038	$	71	$	25,622	$	58,037		$	(1,089	)	$	82,641		$	(612	)	$	82,029

	Common Equity
	Beneficial Interest				Treasury Shares at Cost								Accumulated Other			Total			Noncontrolling
	Shares		Amount		Shares		Amount			Retained Earnings			Comprehensive (Loss) Income			Common Equity			Interests in Subsidiaries			Total Equity
	(In Thousands of Dollars, Except Per Share Amounts)

Balance at October 31, 2020		7,145	$	27,960		137	$	(2,863	)	$	13,791		$	(3,986	)	$	34,902		$	(4,039	)	$	30,863

Stock based compensation expense				12													12						12

Vested share units granted to Directors, including $8 in dividends declared payable in share units ($0.05 per share)		7		118													118						118

Net income											558						558			221			779

Dividends declared, including $8 payable in share units ($0.05 per share)											(350	)					(350	)					(350	)

Net unrealized gain on interest rate cap and swap contracts														387			387			111			498

Balance at January 31, 2021		7,152	$	28,090		137	$	(2,863	)	$	13,999		$	(3,599	)	$	35,627		$	(3,707	)	$	31,920

	January 31,			October 31,
	2023			2022
	(In Thousands, Except Share and Per Share Amounts)
ASSETS

Real estate, at cost, net of accumulated depreciation	$	95,340		$	95,875
Construction in progress		692			688
Cash and cash equivalents		37,187			49,578
Investment in tenancy-in-common		18,731			18,798
Tenants' security accounts		1,024			1,038
Receivables arising from straight-lining of rents		762			790
Accounts receivable, net of allowance for doubtful accounts of $1,040 and $1,126 as of January 31, 2023 and October 31, 2022, respectively		621			802
Funds held in post-closing escrow		5,962			6,251
Prepaid expenses and other assets		3,018			3,176
Deferred charges, net		233			244
Interest rate swap contracts		959			1,409
Total Assets	$	164,529		$	178,649


LIABILITIES AND EQUITY

Liabilities:
Mortgages payable, including deferred interest of $222 as of January 31, 2023 and October 31, 2022	$	138,824		$	139,217
Less unamortized debt issuance costs		1,030			1,145
Mortgages payable, net		137,794			138,072

Deferred director compensation payable		—			2,317
Accounts payable and accrued expenses		1,426			1,306
Dividends payable		372			10,573
Tenants' security deposits		1,285			1,285
Deferred revenue		451			357
Total Liabilities		141,328			153,910

Commitments and contingencies

Common Equity:
Preferred stock with par value of $0.01 per share:
5,000,000 and 0 shares authorized and issued, respectively		—			—
Common stock with par value of $0.01 per share:
20,000,000 shares authorized at January 31, 2023 and October 31, 2022;		74			73
7,435,753 and 7,048,344 shares issued plus 0 and 272,882 vested share units granted to directors at January 31, 2023 and October 31, 2022, respectively
Additional paid-in-capital		31,891			30,635
Accumulated deficit		(6,330	)		(6,208	)
Accumulated other comprehensive income		959			1,409
Total Common Equity		26,594			25,909
Noncontrolling interests in subsidiaries		(3,393	)		(1,170	)
Total Equity		23,201			24,739
Total Liabilities and Equity	$	164,529		$	178,649

($ in Millions)	January 31, 2022	October 31, 2021		January 31, 2023	October 31, 2022

Fair Value	$136.5	$301.6		$133.8	$132.2

Carrying Value, Net	$136.5	$299.9	Carrying Value, Net	$137.8	$138.1

	Three Months Ended January 31, 2022				Three Months Ended January 31, 2021
	No. of Options		Exercise		No. of Options		Exercise
	Outstanding		Price		Outstanding		Price
Options outstanding at beginning of period		310,740	$	18.35		310,740	$	18.35
Options granted during period		0-		0-		0-		0-
Options forfeited/cancelled during period		0-		0-		0-		0-
Options outstanding at end of period		310,740	$	18.35		310,740	$	18.35
Options vested and expected to vest		309,450				308,310
Options exercisable at end of period		292,540				276,340

Reconciliation to condensed consolidated net income-common equity:
Deferred rents - straight lining		(10	)		(206	)
Investment income		26			30
General and administrative expenses		(1,327	)		(1,260	)
Loss on investment in tenancy-in-common		(124	)		(27	)
Depreciation		(1,820	)		(2,295	)
Net gain on sale of Maryland properties		70,003			—
Financing costs		(2,928	)		(3,132	)
Net income		69,153			779
Net income attributable to noncontrolling interests in subsidiaries		(23,376	)		(221	)
Net income attributable to common equity	$	45,777		$	558